The price has now gone up 14% in the past year. The moves follow Tesco’s decision to raise its dedicated farmer group milk price by 0.75ppl last week, although the supermarket had initially claimed that would not translate into an on-shelf increase.
Suppliers have also been upping the prices they pay to farmers, with Arla, Robert Wiseman and Milk Link all adding 1ppl to farmers’ returns in the past week. The retail price increases had been largely predicted as supermarkets sought to secure supplies at a time of very tight milk production.
“We have shown that the Tesco deal is a standalone deal and our increase shows that we have other conversations with other retailers,” said Jonathan Ovens, of the Arla Foods Milk Partnership. “Our customers looked at the whole picture and recognised that the liquid sector has the highest demand for milk and they had to safeguard it.”
The rises are expected to put added pressure on the likes of Watson’s Dairies and Freshways to pay more, as their farmer milk prices are calculated using formulae that take account of the prices of other dairies.
The middle-ground retailers they supply will no doubt be watching carefully. Elsewhere in the UK, Jersey Dairy announced this week it had been forced to raise the wholesale price of its milk due to increased farmgate input costs, which can no longer be absorbed by its producers.
The co-operative increased its conventional milk price by 5ppl, and its organic milk price by 6ppl. Retailers on the island responded to the announcement by raising the price of their conventional milk by 5ppl.