Market pressures have forced one of the dairy co-ops, Dairy Farmers of Britain, to reduce its milk price to farmers by 0.35ppl for July - as predicted in The Grocer (July 9, p56).
Bosses blamed the middle-ground retail sector and the fact it was paying more to members for milk fat and protein than it was getting from the market.
A spokesman said: “While the cost push initiative has seen some success, the increases we secured in the liquid market are under severe pressure because of competitor activity and higher oil-based manufacturing costs.”
DFB benefited from the retail cheese initiative (see right). But because it does not sell much milk into the cheese sector, the effect on its overall milk price has been only slight.