Asda in milk price pledge to farmers

Supermarket giant Asda has raised the amount it pays to its dairy farmers to three pence a litre from next month.

The move affects 272 dairy farmers and is worth an extra £30,000 a year.

But Shropshire dairy figures say the increase, up from one pence per litre, does not go far enough and will still leave farmers selling their milk at less than the cost of production.

It is not known how many Shropshire farmers are affected by the rise, which comes into force on August 1 – the same day as dairy giant Arla imposes cuts of two pence a litre.

That would see its farmers selling each litre of milk at around 25p.

Asda claims its decision would offset that cut and see farmers continuing to receive 27.5 pence per litre –below the 30p dairy farmers say it costs them to produce a litre of milk.

Jeremy Lowe, the National Farmers' Union's Telford-based dairy adviser, said: "Asda's announcement is a step in the right direction though it does not go far enough."