January milk price rise for Dairy Crest producers
About 1,000 milk producers supplying Dairy Crest will get a 1-1.25p/litre increase from 1 January, taking its suppliers for liquid milk markets to 30p/standard litre and those on its Davidstow cheese contract to 30.25p/litre.
It was a difficult marketplace and while Dairy Crest hoped to be able to issue further price rises, any future increases were dependent on customers paying more, it said.
Without further market driven price movements to reflect increased costs, milk production would continue to be significantly depressed, warned Dairy Crest Direct chairman and milk producer David Herdman.
Those on the Davidstow contract supply milk for a range of cheese brands. Among these is Cathedral City, which has sales of £250m (up 21% year on year) and is the UK’s leading cheddar brand. DC’s Davidstow brand is the fastest growing branded cheddar.
“The success of Cathedral City means that we need more milk in the South West and this latest price increase shows our continued commitment to support our farmers.”
Group milk procurement director Mike Sheldon
The latest increase takes the Davidstow price to its highest ever level. “The success of Cathedral City means that we need more milk in the South West and this latest price increase shows our continued commitment to support our farmers,” said group milk procurement director Mike Sheldon.
“However, while justified, this increase does widen the gap between our cost of cheese production and that of imported cheese and looking forward this is something we have to be mindful of.”
The 1,000 or so producers who will receive these January price rises account for 75% of DC producers. The remaining 25% are on retailer aligned contracts such as that for the Sainsbury’s dairy development group where the price is calculated through a formula.
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