The move comes following six months of price stability after Dairy Crest slashed its price by 1.5ppl in March.
There price for farmers on Dairy Crest’s Davidstow contract will remain at 26.42ppl. This follows an increase of 0.25ppl for the August milk price, announced last month.
Dairy Markets have declined further in the past month with the result of the last GDT auction being widely reported as extremely disappointing for the whole dairy supply chain,Dairy Crest’s Mike Sheldon claimed.
“At the same time, milk supply has remained strong and ahead of forecast,” he said.
Adverse market conditions
“This has meant we have had to process a significant volume of milk into commodities such as skimmed milk powder and cream. Therefore we are now in the position that we have to reflect these adverse market circumstances within our liquid milk price.”
Dairy Crest would work hard to support farmers through this “difficult time”, Sheldon added.
Dairy firms' 2015 price cuts
- 2.43ppl: First Milk (February 1)
- 1.75ppl: Müller UK & Ireland (March 5)
- 1.8ppl: Arla Foods (July 9)
- 1.5ppl: Dairy Crest (March)
- 0.8ppl: Arla Foods (September 1)
- 1.4ppl: Dairy Crest (September 1)
Markets have weakened during Dairy Crest’s period of stability and production remained strong and competitor pricing continued to fall,Dairy Crest Direct’s chairman David Herdman said.
“It has therefore proved impossible to mitigate the relentless downward market pressures further into September,” Herdman said.
Different market conditions
“Against a different set of market conditions, we were pleased to conclude a price hold at Davidstow.”
The Davidstow contract remains one of the most competitively priced for farmers in the south west, Dairy Crest added.
The Liquid milk price change has been agreed with DCD following discussions in line with the new DPO status achieved by DCD last month. DCD provides independent representation for dairy farmers that supply Dairy Crest.
Earlier this week, Arla Foods was also forced to cut its milk price. Arla slashed 0.8ppl from the price paid to farmers to take it to 23.01ppl.
The National Farmers Union called for the UK government provide better support for dairy farmers, similar to that provided by the French government.