Freshways guarantees minimum milk price until March 2022

Freshways has announced a 1.5p/litre milk price increase from 1 October and promised its farmgate price will not be cut for at least six months.

The business, which has just started a recruitment drive, has increased its standard litre price to 30p/litre.

Freshways managing director Bali Nijjar said the commitment to offer a guaranteed minimum payment level for six months would give farmers some certainty.

See also: Medina and Freshways Dairy confirm merger plans

It was also an acknowledgment of the cost increase pressures farmers were facing and would allow them to budget accordingly.

The business had also previously pledged that until the end of the year, any B-litres, over and above a supplier’s A-litre quota allocation, will be paid at 28.5p/litre.

“The price promise for B-litres we made back in July will remain in place until 31 December, at which point we will review for the new year,” said Mr Nijjar, in a letter to suppliers.

The business was also starting a recruitment drive for additional direct volumes, he added.

“Any existing supplier wishing to increase their standard litre allocations should put their request in writing.”

Freshways’ current milk pool is about 350m litres/year, but it is looking to expand this by another 50m litres.

Other processors

Milk producers will be hoping that Freshways’ announcement will signal the start of a wave of price rises over the coming weeks to help offset the massive increases in costs they are facing.

NFU dairy board chairman Michael Oakes said despite the positive sentiment in the global dairy markets at the moment, many farmers were feeling constant pressure on their margins.

“We’ve seen massive increases in input costs such as feed, fertiliser and energy,” he said.

“Coupled with the labour shortages across the dairy supply chain, we are now facing escalating production costs.”

Arla has already announced its members are to receive a 0.32p/litre increase from 1 October on the back of rises in dairy commodity prices.

Eyes will now be on Muller, which is expected to announce its latest price by the end of this week.

September has been a quiet month for announcements, with many processors, including First Milk, Barber’s, Meadow Foods and Saputo, previously announcing they would hold their September price until at least 31 October.