Tesco is extending its Tesco Sustainable Dairy Group model to cheese producers for the first time, in a trial kicking off next month.
Thirty Devon dairy farmers who supply milk to cheesemaker Parkham Farms – which in turn supplies Tesco’s own-label Cheddar supplier, Adams Foods – will participate in the trial, which will run from 1 November until the spring of 2014.
“We’re looking forward to reviewing the results, and establishing how we can help secure the future of a prosperous, sustainable British cheese industry”
John Scouler, Tesco
They will receive a milk price of 33.79 pence per litre – the same as liquid milk producers in the TSDG – including a 0.5ppl premium in return for submitting their production costs to consultants Promar, who already calculate cost of production for TSDG liquid farmers.
Tesco said the trial would “help establish what the costs of production are for milk for cheese”. It plans to review the data at the end of the trial in spring, before making a decision on whether to make the extension of the TSDG to cheese permanent.
The TSDG was launched in 2007 to help dairy farmers supplying milk to Tesco cope better with market volatility and changes in production costs. Tesco UK commercial director John Scouler said the cheese trial would build on the success of the TSDG. “Since we launched the TSDG in 2007, we have invested £180m into paying an above-average price to British dairy farmers, improving cow welfare and environmental standards, and a next-generation scholarship programme.
“This trial means we can offer similar support to the dairy farmers who provide milk for our cheese. We’re looking forward to reviewing the results, and establishing how we can help secure the future of a prosperous, sustainable British cheese industry.”
Adams Foods said it had worked closely with Tesco and Parkham Farms on devising the trial, and the extension of the TSDG model to cheese was a positive move for the British dairy industry.
“At a time when the industry continues to be under significant pressure, we believe that the TSDG model has great potential in aligning the interests of farmers, producers and retailers alike,” said Gordon Walsh, director of sales for Tesco at Adams Foods.
“It will provide a secure and sustainable platform for the British cheese supply chain”
Gordon Walsh, Adams Foods
“It will provide a secure and sustainable platform for the British cheese supply chain, and Adams Foods hope that in due course we can work with Tesco to extend the benefits of this innovative initiative to our other long-term British cheese supply partners.”
Parkham Farms director Peter Willes added: “Tesco has taken an impressive and important step to ensure the milk producers we work with are paid a sustainable price. Nobody else in the industry offers this level of confidence to dairy farmers whose milk goes into cheese. If the trial is successful, this will make a huge difference to our farmers, to Parkham Farms, and to Tesco.”
The trial was also welcomed by the National Farmers’ Union. President Peter Kendall said if it proved successful, it would boost farmers’ confidence to invest in the future. “Ultimately, we look forward to Tesco sourcing more of the food it sells from closer to home and consequently growing the market for British dairy products,” he added.
The 30 farmers involved in the trial produce 100% of the milk needed for Tesco’s mature and extra-mature Cheddar lines.