Dairy Crest has followed Robert Wiseman Dairies in announcing a further cut to its standard farmgate milk price.
Farmers on the company’s standard liquid agreement are facing a reduction of 1.65p per litre from 1 August, to 24.94ppl. Those on Dairy Crest’s Davidstow contract - who were hit with a price cut at the end of May - are not affected by the latest reduction.
The news comes after Wiseman announced a 1.7ppl reduction last week.
Dairy Crest said the latest price cut was necessary because market conditions continued to be “tough”. It claimed farmers would not face any further reductions this year and said it would look to increase the price again as soon as feasible.
The August price cut comes after Dairy Crest announced a 2ppl cut to its standard farmgate price at the end of April, citing difficulties in its dairies division.
Group milk procurement director Mike Sheldon said Dairy Crest had a clear and robust plan for the long-term future of its dairies business and was making progress in a difficult environment.
“We have maintained our liquid milk price for three months while we have worked hard to achieve greater operational efficiencies and selling price increases,” he added. “We are acutely aware of the impact this price reduction could have on our farmers, but we have to look at affordability and take responsible action when required.”
Sheldon said Dairy Crest had listened to concerns over the short notice given to farmers back in April and was therefore now giving a minimum of four weeks’ notice.
“We have also agreed to work with Dairy Crest Direct to review the way we agree milk price changes in the future – with the aim of delivering improved transparency, simplicity and longevity,” he said.
“We know farmers want clarity and a process in which they have confidence. This is our agreed objective with DCD and we don’t intend to let any discussion at a national level on a voluntary code slow us down in delivering this.”