Dairy Crest has delivered a huge blow to its Davidstow farmers by slashing 1.6ppl off their milk price from March 1.
In another tumultuous week for UK dairying, Dairy Crest’s move will take the Davidstow price to 22.72ppl.
First Milk also confirmed that, following recent milk price announcements and continued market weakness, the projected returns for itsbrokerage business during February have reduced. This led to a February A price reduction of 0.62ppl for Midlands and East Wales balancing; and a 0.19ppl fall for Scotland balancing.
Ruth Askew, head of procurement at Dairy Crest, said: “I fully appreciate this reduction will be disappointing news. Dairy Crest has worked hard over the course of this milk year to try to deliver price stability for our Davidstow farmers. We recently introduced a price floor through to the end of February.
"This helped to provide some certainty to farmers over the winter months.
“However, dairy markets are under extreme pressure and milk supply remains high. The performance of our cheese brands have enabled us consistently to pay a leading milk price for our Davidstow milk.
"However, we are not immune from market forces and must take responsible action to make sure our products are competitive."
Newly re-elected First Milk vice-chairman Nigel Evans said: “Myself and the whole board fully recognise the difficulties which this continued market slump is creating for our members across the UK. Unfortunately, nobody is able to predict when global milk supplies will tighten or when markets will turn, in the meantime we remain 100 per cent focused on running First Milk as efficiently and effectively as possible to maximise the market value that we can pass back to our members.”