Rebuild farmer margins

  • Print
  • Share
  • Comment
  • Save

Shortly after publication of your analysis ‘Soaring costs create crushing climate for milk processors’, Tesco cut its milk price to Tesco Sustainable dairy Group (TSDG) farmers by 0.65ppl.

The TSDG price relies on an estimate of costs of production, based on performance of farmers benchmarked from within the group, and projected input costs. It guarantees never to drop below the base price of the respective processors (through whom the milk is supplied).

To suggest that liquid milk buyers, who do not commit to cover farmers’ costs of production, should take this as a cue to cut milk prices is ridiculous.

If cream deflation is now the reality, don’t look to the farmer’s non-existent margin to balance the equation. Recent cost of production research on behalf of Dairy Crest farmers put the breakeven price for milk at 29.33ppl. The average price received in January by farmers was 28.84ppl!

Farmers will not tolerate price cuts this spring. The money to rebuild processor margins has to come from the market.

Mansel Raymond, NFU dairy board chairman

Have your say

These comments have not been moderated.

You are encouraged to participate with comments that are relevant to our news stories. You should not post comments that are abusive, threatening, defamatory, misleading or invasive of privacy. For the full terms and conditions for commenting see clause 7 of our Terms and Conditions ‘Participating in Online Communities’. These terms may be updated from time to time, so please read them before posting a comment.

Any comment that violates these terms may be removed in its entirety as we do not edit comments.

If you wish to complain about a comment please use the “report this comment” facility or email groceremails@wrbm.com

Mandatory
Mandatory
Mandatory
Mandatory
  • Print
  • Share
  • Comment
  • Save

Grocer jobs Experts in FMCG

ML Accessories AREA SALES MANAGER

AREA SALES MANAGER - ML Accessories

Good basic salary + excellent bonus opportunity + car + laptop + mobile phone + benefits
Search jobs
Sign in

Newsletter Sign-up

Free

I wish to receive the following newsletters:

For Members

Become a Gold Member to receive these newsletters:

Become a Finance Member to receive these newsletters:

Become a member of The Grocer

DIRECTORY

The+Grocer+Directory

CLICK HERE to search for the products, services and companies you need in the definitive guide to the UK food and drink industry.

FOLLOW THE GROCER

The Grocer's commentators and opinion makers