Robert Wiseman Dairies has followed the lead of Dairy Crest by cutting its standard-contract milk price to farmers by 2p per litre.
The cut will take Wiseman’s standard milk price to 26.42ppl from 1 June, in a move affecting about 300 farmers not on retailer-specific contracts.
The company said the cut was its first farm-gate price reduction in three years and was necessary because of the current “challenging market environment” and the recent collapse in the value of bulk cream.
“Higher returns from cream prior to the turn of the year partially compensated for other pressures facing the business, but the collapse in bulk cream value since the beginning of 2012 has resulted in an untenable position,” Wiseman said in a statement.
Milk procurement director Pete Nicholson added it was essential Wiseman continued to strike a balance between paying a competitive milk price to farmers who were not aligned with major retailers and the ability to compete.
“After a three-year period which has seen our farm-gate price increase five times by a cumulative 4.55ppl, we must now reflect the competitive environment we are operating in and substantially lower returns from the bulk cream market,” he said.
Wiseman’s milk price cut comes after Dairy Crest announced a 2ppl reduction in its standard-contract price last week. The move sparked fierce criticism from the NFU, which was furious that Dairy Crest had given farmers only days’ notice of the price change.
Wiseman is giving its farmers one month’s notice.