Boost for sector as buyers increase milk payments

the dairy farming sector has been given a glimmer of hope after a series of increases in the price they are paid for milk.

Tesco, Freshways and Milk Link all began paying their suppliers a higher rate this week.

The increase from Tesco also represents a record-breaking rise, with farmers in its Sustainable Dairy Group now receiving 29.78 pence per litre.

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Elsewhere, Freshways and Milk Link producers are receiving an extra 1ppl while the cheese market also received a boost when Wyke Farms and Barbers announced increased prices for milk being made into cheese.

The increased prices, however, come against a backdrop of rising overheads and a long-term malaise in the amount paid to farmers for their milk.

National Farmers Union dairy board chairman Mansel Raymond said: “Tesco’s price model for liquid milk is now breaking records with a price that tops any price previously paid by a retailer for milk.”

However, Mr Raymond also said that more chains needed to recognise the problems within the sector and reflect the cost of production in their price.

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“I just can’t understand why more retailers and buyers of milk and dairy products aren’t showing the same level of commitment to their farmer suppliers.

“The recently published NFU Cost of Milk Production report suggested that the average cost of producing a litre of milk was 29ppl.

“Yet, the average British milk price in January was just 25.6ppl. Tesco will be one of only a few retailers paying more than this which is unacceptable. All retailers should be reflecting the strength of dairy markets in the price they pay for milk and cheese and ensuring that their dairy suppliers are able to make a fair profit as well as covering their costs.”

Tesco board director Lucy Neville-Rolfe said: “With the price of feed and production costs rising it is important to support our British dairy farmers.

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“We will continue to pay a fair price for the milk they supply and to work with the Dairy Centre of Excellence at Liverpool University to improve dairy productivity and sustainability.”

Milk Link’s increase of 1ppl for both manufacturing and liquid schedules takes its member price to 27ppl.

Neil Kennedy, Milk Link chief executive, said: “The milk price increase and end of the investment ‘levy’ will provide a much-needed boost to our members’ farm incomes and cash flow at a time when they are under considerable financial pressure due to on-farm cost inflation.

“The increase is a result of our successfully securing price increases combined with strong ongoing returns from the commodities markets.”

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