Tesco continues to pay dairy farmers a fair price for their milk

25 Mar 2015

Tesco has today confirmed the new price it will pay its British dairy farmers for milk. Following the regular 6-monthly review of production costs, the new price Tesco will pay for milk from 1 May, will be 30.93ppl.

Tesco has today confirmed the new price it will pay its British dairy farmers for milk. Following the regular 6-monthly review of production costs, the new price Tesco will pay for milk from 1 May, will be 30.93ppl*.

Set up in 2007, the TSDG comprises around 600 farmers who supply Tesco directly with own-brand fresh and filtered milk products and share Tesco’s aim to deliver the best quality milk possible for customers. The TSDG pricing mechanism ensures that Tesco pays a price for the milk that is buys that reflects the cost of production to dairy farmers, helping them to invest and plan for the future.

The new price has been set using the independent consultancy-Promar- to make sure that price paid by Tesco reflects average cost of production of the TSDG group. That price is agreed in collaboration with farmers, then set for six months and is completely independent from the retail price for milk.  Customers can be assured that every pint of own-brand milk they buy from Tesco supports a TSDG farmer, helping to deliver a sustainable future for the British dairy industry.

 

Tom Hind, Tesco’s Director of Agriculture said:

‘The TSDG remains a cornerstone of our plans to build ever stronger relationships with our producers. Over the past eight years we have worked in partnership with our dairy farmers to provide the best quality milk possible for our customers, whilst still paying a fair price for the milk we buy.

‘Through TSDG and our pioneering Dairy Centre of Excellence with Liverpool University, Tesco has invested £200 million into British dairy farming. By agreeing a clear price for a period of six months, we are able to offer our farmers valuable security in a volatile market.’

 

James Stephen, Aberdeenshire TSDG dairy farmer and Committee Chairman said:

‘The pricing structure of the TSDG goes some way to providing stability and peace of mind, which is often lacking in an increasingly volatile industry. Set for six months, all farmers in the group have real certainty over the milk price they’ll receive, which is of huge benefit when budgeting and planning for the future.’

The new price covers all Tesco own-brand fresh & filtered milk (1, 2, 4, 6 pint and 1 and 2 litre – excluding organic milk); single, double & extra thick double cream (150, 300, 600 ml) products and mature & extra mature cheddar.

 

 

Notes to editors

  • The new price is following an independent cost tracker review by agriculture research consultancy Promar. Tesco pays a price for milk that reflects the cost of production, calculated from costs submitted to Promar.
  • The new price, which is 1.08ppl lower than the previous 6 months’ price, takes into consideration a reduction in the cost of feed and rising milk volumes
  • *The price includes 0.5ppl for sharing cost data with Promar International

 

Key TSDG facts:

  • Investment - £200m invested directly into British dairy farming
  • Investing in the Future- Over 1000 children have visited the Tesco Dairy Centre of Excellence to improve their knowledge and understanding of Dairy production
  • Animal Welfare- Our dairy farmers must adhere to the nationally recognised Red Tractor assurance scheme, as well as additional Tesco welfare standards, which are used to drive continuous improvement of cow health and welfare.
  • Proud to be members of the TSDG-96% of our farmers believe that they have benefitted from being a member of the TSDG.
  • Building for the Next Generation -55% of TSDG Members are planning to expand their business within the next five Years
  • Productivity- The average Tesco dairy farmer has grown milk output by 26% since 2007
  • Growing Confidence -92% of TSDG farmers are expecting their plans for milk production to increase or stay the same over the next five years.