Dairy Crest has been handed a boost with a long-term extension to its milk supply deal with Morrisons.

Its contract with the Bradford-based grocer will now run until 2015. Arla Foods has also extended its supply deal with the supermarket for the same period.

“We believe our clear focus on quality, service and cost puts us in a good position in a very competitive market,” said Dairy Crest liquid products MD Toby Brinsmead.

Morrisons group trading director Martyn Jones said: “This latest deal strengthens our commitment to UK dairy farming and provides long-term security to a large number of farmers supplying these two major processors.

National Farmers Union (NFU) dairy chair Mansel Raymond said the deal would “generate stability and build farmers’ confidence in the long-term viability of the British dairy industry”.

The news comes with Dairy Crest set to issue a trading update for the six months to 30 September tomorrow.

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