Dairy Crest milk pricing formula ‘ready by April’
Dairy Crest and its producer organisation Dairy Crest Direct (DCD) have announced plans to offer farmers on standard contracts the opportunity to move to a “groundbreaking” formula-based milk price.
The pricing mechanism has been developed by Stephen Bradley, from the milk price comparison website milkprices.com, and will be available from 1 April 2013.
Mr Bradley was appointed by Dairy Crest and DCD to find a simple, more transparent formula method of agreeing the milk prices currently negotiated between the two parties.
Both Dairy Crest and DCD hope its adoption will help take some of the heat out of milk price negotiations and address some of the challenges facing the sector.
DCD chairman David Herdman said: “The finer details of the actual formula calculation are being finalised but it will take into account movements in both key on-farm costs and dairy market indices.
“I believe this is a real step forward in our commitment to find a better way to agree farmgate milk prices for DCD members.”
DCD chairman David Herdman
“I believe this is a real step forward in our commitment to find a better way to agree farmgate milk prices for DCD members.”
Dairy Crest’s group milk procurement director Mike Sheldon said the new formula driven price would be offered to farmers on a voluntary basis with offers being confirmed on a “first come, first served” basis.
“We want a long-term relationship with our farmers and are determined to deliver greater flexibility and choice in the consideration of contract options, as well as trust in the pricing process,” he added.
Further details about the price formula will be provided to farmers supplying Dairy
Crest over the coming weeks, together with training workshops.
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