Farmers Get Paid More As Consumers Pay Less

UK - Tesco has confirmed a new higher milk price of 30.21 pence per litre for farmers, but has lowered the price in store for customers.

27 September 2011

2 minute read

Europe

From 1 October, Tesco Sustainable Dairy Group members, who take part in the independent cost tracker review, will receive a new price of up to 30.21 ppl for their milk.

This is an increase of 0.43 ppl, since the previous six-month review last April and the highest price ever paid to dairy farmers by Tesco.

Tesco Director of Dairy, Sean McCurley said: "The independent six-month review of farmer production costs by agriculture research consultancy Promar, has shown an increase in the cost of feed, fertiliser and general farm overheads. We have reflected this in the new price we will pay our farmers for their milk, including our allowance of over £50,000 for unpaid family labour."

Confirmation of the new higher price Tesco is paying its dairy farmers follows the retailer’s Big Price Drop announcement.

Today, Tesco is cutting the retail price of thousands of essential items, including milk, which is now £1.25 for a four-pint carton. Tesco has invested more than £500 million to help customers with the cost of their weekly shopping and reduce the price of products customers need to buy everyday.

Sean McCurley said: "We are delighted to be able to pay our farmers more for their milk, while offering lower prices on the essentials, which will help millions of families.”

Tesco continues to pay its dairy farmers a significantly higher price than the average processor’s price which stands at 28.55ppl as of 1October 2011. This means Tesco is paying its farmers 1.66ppl more than the average price paid.

The Tesco Sustainable Dairy Group farmers now also receive an additional amount to cover any costs incurred for the new on-farm code of practice. This has just been launched across the TSDG to ensure it has leading animal welfare on its farms. The code of practice provides a simple set of measurable targets and absolute standards, which farms supplying Tesco with milk must comply.

Sean McCurley continues: "Thanks to the security and confidence our cost tracker review provides, we have seen many of our dairy farmers able to invest and improve in their businesses. From increasing herd numbers to state of the art milking parlours, to on-farm building improvements and further investment in herd health. Today more and more of our farmers are investing in their future and staying in dairy farming."

Andy Bloor, Dairy Farmer and Farmer Committee Chairman said: "The TSDG costtracker gives us confidence to plan ahead and think of our business in the long term. This new price remains considerably above the current market value and reflects the transparent way Tesco works with the dairy industry."