Müller offers farmers fixed price following Lidl deal
Dairy giant Müller has launched a new initiative designed to help British dairy farmers manage the impact of extreme milk price volatility.
The move follows recent confirmation by Lidl UK of a new partnership with Müller Milk & Ingredients, which will see the dairy company become the supermarket’s main milk supplier from June 1.
Müller Direct farmers will be offered the option to secure up to 50 per cent of their milk supply at 28ppl fixed price for up to three years, to fulfil the supermarket’s requirement for fresh milk.
By securing a fixed price for a portion of their milk supply, farmers can substantially reduce their exposure to market volatility which has seen farm gate milk prices suffer dramatic swings in the past few years.
Rob Hutchison, Müller Milk Supply director, said: “There’s no doubt that the highs and lows of market volatility are challenging to deal with, creating uncertainty and inability to plan ahead.
“This new approach gives dairy farmers security and confidence for the future and is a very good example of innovation which benefits the whole supply chain.”
Müller Direct farmers can apply to apportion milk in 10,000 litre per month lots from today and the ‘Müller Direct Fixed Price Contract’ commences on June 1.
Michael Oakes, NFU dairy board chairman, said: “It’s encouraging that since our dairy risk management conference last year a number of milk buyers and retailers have put options in place to help farmers manage volatility.
“It is clear that we will continue to see a volatile global milk price and it is important that options are made available to help farmers alleviate the impact of volatility on their business.
“Providing farmers with the ability to be able to fix prices for a set time and volume is a move in the right direction.
“We continue to call for an end to exclusivity in dairy contracts to give farmers the opportunity to spread their risk and manage market volatility on all their milk supply."