Müller has written to dairy farmers to confirm that its standard litre milk price will increase by an average of 1 pence per litre from October 1st 2016.
The move reinforces Müller’s pledge to maintain a stable, competitive milk price at every point in the market cycle, and reflects a tightening of milk supply and a strengthening of global commodity markets.
At the request of its farmer board, Müller will start the process of aligning the milk price paid for its two liquid contracts, Müller Milk Group (ex- Müller Wiseman Dairies producers) and Direct Milk (ex-Dairy Crest producers).
The milk price harmonisation will be phased over time to ensure that all non-aligned dairy farmers supplying the business can benefit from the same standard liquid price.
“We are hopeful that dairy commodities markets have turned a corner and we will now see a sustained recovery,” said Lyndsay Chapman, Müller’s Agriculture Director.
“Cream and butter values have shown improvements that are now starting to be realised in our business, although the latter is taking longer to recover due to the volumes of butter in storage. Better returns will lead to higher farm gate milk prices, and we are optimistic in this respect.”
The business has also reiterated its long held commitment to transparent farm gate pricing.
Müller will maintain a competitive standard milk price with a separate retailer supplementary payment aimed at its non-aligned producers (see notes to editors).
“It is important to stress that our standard price is competitive in its own right, but with the addition of the retailer supplement, actual realisations for Müller non-aligned farmers are substantially higher than those received by farmers supplying other processors who receive similar supplements but choose not to offer the same level of transparency,” said Lyndsay Chapman.
“It is right that this additional and very welcome supplement is aimed at Müller farmers who aren’t already part of one of our supermarket aligned groups. We wouldn’t be able to achieve this if the supplement was simply absorbed into our standard litre price and, as a result, spread across all Müller suppliers including some aligned producers.”
“Whether our farmers are in a supermarket group or not, it is our intention to optimise their actual returns each month”.
Roddy Catto, Chairman of the Müller Milk Group farmer Board said:
"Whilst there remains a long way to go before farmers' milk prices recover to a level which is sustainable, this is an important first step and acknowledgement that the markets are looking more positive.
“Müller's focus on adding value to milk meant that when the markets hit their lowest point we were not fully exposed to the very low returns being received by others in our industry.
“Nevertheless, this has been an extremely painful and challenging period for Müller suppliers and we now hope to see a sustained recovery. We will continue to work very closely with Müller to build on this positive first step.
"We are working as a combined farmer Board and we requested that Müller equalise the prices on its standard liquid contracts. The process has started this month, and the intention is to complete this as soon as possible."
Ends… 31 August 2016
Issued by Müller Group Communications Tel +44 1355 598585, +44 7900 4302690 or firstname.lastname@example.org
Notes to Editors - Milk Price Breakdown:
|Müller Milk Group||Müller Direct Milk||Average Müller Liquid Price|
|Standard Litre prices (ppl)|
|Milk Price Sep 2016||18.660||18.000||18.432|
|Milk Price Oct 2016||19.560||19.189|| |
- The prices above exclude the Retailer Supplement which for July was calculated at 2.894 ppl and is paid to all non-aligned farmers not linked to the Formula. The figure is calculated after the month end and is paid out to all qualifying farmers as a separate payment.
- The average Müller Liquid milk price for October including the latest forecast of the Direct Milk Formula price is 20.37 ppl (excluding the Retailer Supplement)
Müller UK & Ireland
Müller UK & Ireland is wholly owned by the Unternehmensgruppe Theo Müller. It employs around 10,000 people in a business which comprises two distinct business units: Müller Milk & Ingredients and Müller Yogurt & Desserts.
Based in Market Drayton, Müller Yogurt & Desserts is the UK’s leading yogurt manufacturer, responsible for major brands such as Müller Corner, Müllerlight and Müller Rice. It also produces, at production facilities in Minsterley near Shrewsbury, chilled desserts including Cadbury Bubbles of Joy, Pots of Joy, Layers of Joy and Twin-pot products under licence from Mondelez International.
Müller Yogurt & Desserts also supplies the UK private label yogurt market from a state of the art yogurt facility in Telford, Shropshire.
Müller Milk & Ingredients aims to be the biggest and best fresh milk and ingredients business with a network of dairies and depots servicing customers throughout the country, producing skimmed, semi-skimmed, whole, and flavoured milk products for brands such as Black & White, The One, freshnlo and FRijj . It also has the capacity to produce salted, unsalted and lactic butter each year for both the domestic and international markets.
The acquisition of Dairy Crest’s dairy operations in December 2015 marked a milestone in Unternehmensgruppe Theo Müller’s global growth strategy and in particular its aspiration to place much more emphasis on end to end supply chain innovation, adding value to the UK dairy category.