Suppliers of more than 98 per cent of core volume have now signed up to the new contract which was established in conjunction with Dairy Crest Direct.
Having come into effect on April 1, the new contract is based around a collective core volume which is the volume of milk the creamery actually needs.
The aim is to ensure that milk supply is better matched to the requirements of Davidstow and give producers more information to help them plan for the future.
The collective core volume is divided out among farmer-producers relative to their production last year.
Unless the collective core volume is breached, all producers signed up to the new contract, irrespective of the individual volume, receive the full price which until June, has been conformed at 22.72ppl.
If collective core volume is breached, individuals whose own production exceeds their allocation, will receive the lower price on their excess litres. This lower price is calculated using a market-related indicator – AMPE minus 2ppl.
For those farmers who have chosen to remain on the existing contract the milk price from April 1 is 21.92ppl which, says DC, reflects the on-going deflationary market conditions and cost of balancing excess milk.
Ruth Askew, head of procurement, said: “Dairy market conditions remain under extreme pressure.
"Dairy Crest always aims to provide as much stability for our farmers as we can. This is why we have agreed to hold our milk price - for everyone - until June, in the hope this will provide some certainty during the spring flush."