Morrisons secures its milk supply

The deal will guarantee that Morrisons' fresh milk supply will come from the two processors until February 2015.

Morrisons said the move was part of its ongoing support for British farming.

The group said that the deal demonstrated its future vision and its promise to secure a sustainable British milk supply long term.

Martyn Jones, Morrisons' group trading director, said: "This latest deal further strengthens our commitment to support UK dairy farming.

"This provides long-term security to a large number of dairy farmers supplying these two major processors."

Dairy board chairman of the National Farmers Union, Mansel Raymond welcomed the move.

"At a time when retailers' retendering their liquid milk contracts is being blamed for driving value out of the supply chain, I am greatly encouraged by Morrisons' decision to sign such a long-term contract with its two milk suppliers," he said.

"By getting closer to its dairy farmer suppliers, Morrisons can secure its milk supply, generate stability and help to build farmers' confidence in the long-term viability of the British dairy industry.

Toby Brinsmead, managing director of Dairy Crest's liquid products business, said: "We believe our clear focus on quality, service and cost puts us in a good position in a very competitive market."