Meadow Foods has announced it will not charge farmers penalties for undersupply.
Meadow Foods has suspended penalties for farmers who do not produce all their A litres.
In a letter seen by Farmers Guardian, the processor said due to farmers having to make adjustments following low prices in the first quarter, there will be no penalties for undersupply.
The letter has been sent out to farmers today (28 July).
Their Production Balancing Scheme states when B prices are higher than A prices, producers can be charged for the difference for undersupplied litres.
The processor said it had been contacted by concerned producers following reports of penalties from other dairy companies.
As Farmers Guardian reported, Freshways wrote to producers in July to remind them of potential penalties for undersupply.
The letter also confirms Meadow Foods’ B price will be higher than its A price in August and they will be contacting farmers soon about its August prices.