Tesco confirms new price for dairy farmers

22 Mar 2012

Tesco Sustainable Dairy Group farmers will receive the new price of up to 29.56ppl from the 1 April. The new price takes into account a reduction in feed costs, predominantly wheat. The price of wheat has fallen from £210 per ton in February 2011, to £165 per ton last month. The new price also reflects an increase for fuel, farm labour costs and unpaid family labour.

 

Tesco has today confirmed the new milk price it will pay its dairy farmers following the six month independent cost tracker review by agriculture research consultancy Promar.

Tesco Sustainable Dairy Group farmers will receive the new price of up to 29.56ppl from 1 April. The new price takes into account a reduction in feed costs, predominantly wheat. The price of wheat has fallen from £210 per ton in February 2011, to £165 per ton last month. The new price also reflects an increase for fuel, farm labour costs and unpaid family labour.

Now in its fifth year, Tesco remains committed to its industry leading price model based on the true cost of production. Since 2007, Tesco has invested £145 million into the Tesco Sustainable Dairy Group over and above the average UK milk price paid to farmers*, meaning farmers who supply Tesco have benefited from one of the highest prices paid by a retailer.

The Tesco Sustainable Dairy Group ensures farmers are paid a fair price for their milk with additional provisions for making a profit including capital investment, depreciation of assets and un-paid family labour.

Andrew Yaxley, Tesco Commercial Director said:

“Five years ago the Tesco Sustainable Dairy Group was established to address the huge uncertainty faced by dairy farmers caused by continuing volatility in the markets, providing much needed stability.

Our 700 farmer members continue to benefit from Tesco’s pledge to recognise the true cost of production with additional provisions, which means a brighter future for British dairy farmers.”

Will Hosford, dairy farmer and Farmer Committee Chairman said:

"While a fall in milk price is never welcomed, the Tesco Sustainable Dairy Group continues to give producers supplying Tesco the confidence to make the necessary investment their businesses demands. This has been a positive journey over the last five years for both farmers and Tesco, and I look forward to continuing this good partnership."

*Source DEFRA

Background information:

  • The result of the TSDG cost tracker review highlighted a reduction in costs primarily driven by reduction in feed.
  • The TSDG members who have signed up with Promar will receive a price of 29.56ppl effective from 1 April 2012.
  • Those TSDG members not participating in the Cost Tracker will receive a price of 29.06ppl from 1 April 2012.
  • The commitment of TSDG is further reinforced by Tesco’s work with Liverpool University through its ‘Dairy Centre of Excellence’. This exclusive agreement brings together the dairy sector to look at issues from animal welfare to consumer trends. This January we also launched a visitor centre which is a national resource point for schools, farmers and dairy industry experts.

 

For more information please contact the Tesco Press Office on
01992 644645

Tesco is the UK's largest retailer and one of the world's leading international retailers. Tesco has around 5,000 stores worldwide, employing over 500,000 people in the 14 countries in which it operates. Our core purpose is to create value for customers to earn their lifetime loyalty. Our success depends on people: the people who shop with us and the people who work with us.