Dairy Crest cuts milk prices

Just two weeks after Dairy Crest, one of the largest milk processing companies in the UK, announced that it was closing two of its dairies with the potential loss of 500 jobs, the company yesterday gave only four days notice to its milk producers of a 2p per litre cut in price

The statement announcing the cut to its non-aligned producers refers to the “downward pressure on its selling prices in a tough consumer environment and an extremely competitive middle-ground as well as steeply falling commodity markets”.

Although none of 600 or so farmers affected by the decision are from Scotland, NFU Scotland dairy policy manager George Jamieson described the news as “very disappointing”.

“Liquid processors quite rightly raised the price they pay their suppliers,” he said, “but that rise has not been met by major retailers and once again it’s dairy farmers that have to bridge the financial gap.”

He admitted that Dairy Crest was in a difficult position, having to rebalance its books with the liquid milk arm of the business struggling as well as the sale of its French spread line and the closure of two liquid plants.

He warned that Dairy Crest’s announcement should not be seen as a green light for other processors who might be feeling the squeeze for them simply to drop the price they pay their suppliers.

The Dairy Crest decision was heavily criticised down south, with English NFU dairy board chairman Mansel Raymond stating the company’s problems were no excuse for paying 3p to 4p per litre below the cost of production.

ANDREW ARBUCKLE