The dairy said it was a direct response to farmer feedback
Meadow Foods has announced the launch of a fixed forward pricing scheme for the first time.
The forward fixed price will be 28ppl for a 24 month period from July 1 2018 to June 30 2020.
It said it had been launched as a direct response to farmer feedback.
Every Meadow Foods producer will be automatically allocated some forward fixed price litres from their A litre volume. But producers will have the option to opt out.
This was expected to be around 3 per cent of their annual volume.
Meadow Foods said although the volume for each producer was ‘relatively modest’ it was aiming to build on this and was already talking to other customers interested in forward fixed pricing.
Mark Chantler, chief executive of Meadow Foods, said: “We are pleased to be able to introduce this new pricing option as a direct result of feedback from our producers. We’re committed to offering our producers a simple, secure and straight milk price.”
“Although we feel that milk prices are likely to rise over the summer, it is harder to forecast what the milk price will be for the 24 month period. Having a 28ppl fixed price for the full 24 months will give some producers the security they desire for a part of their allocated volume.”