Shropshire Star

Milk price row: Market Drayton-based Muller to cut price paid to farmers

Muller is to cut 1.5p per litre from the price it pays farmers for milk in January, in a blow to the industry's recovery.

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Muller is based at Market Drayton

Milk prices have been on an upward curve during 2017, bringing relief to under-pressure dairy farmers whose prices had been rock-bottom for more than a year.

But Market Drayton-based Muller has now announced that from the beginning of January the price it pays to farmers on its Direct contracts will drop by 1.5p per litre to 29p.

The reduction comes amid a drop in the value of cream and butter in the UK over the last three months.

Muller's agriculture director Rob Hutchison said: “Substantial movement in butter and cream values is now a familiar characteristic of global dairy commodity markets.

“Whilst we are disappointed to see this sharp decline, the extensive portfolio of added value dairy products we make in the UK will shield farmers from the full volatility of global dairy commodity markets.

"We will continue to offer a stable and competitive milk price at each point in the market cycle.

“In addition Müller Direct dairy farmers have access to innovative tools and support including the Müller Futures Contract and Müller Farm Insights, which provides consultancy to help improve farm resilience.”

Muller said the five per cent reduction in the milk price follows a 25 per cent decline in the UK values of commodity bulk cream and butter since September 2017.

Global prices have also gone into reverse in recent weeks, with the fortnightly Global Dairy Auction which determines the value of milk products seeing four consecutive declines over the last two months.

Muller has been among the dairy companies attempting to mitigate fluctuations in the price of milk, with farmers offered the chance to fix the price they are paid for some of their produce for a year in advance.