Müller UK & Ireland Group has confirmed to non-aligned dairy farmer members of the Müller Wiseman Milk Group (MWMG) that its standard milk price will be 29.00ppl from October 1, 2014.
MWMG members have been given a month’s notice of the change, in compliance with the Voluntary Code.
The reduction of 1.8ppl reflects a sustained decline in revenues generated from sales of butter and cream, commodities which are traded in global markets.
Industry figures published this week by DairyCo highlight a £1,000 per tonne year on year reduction (27%) in the value of butter and a 30% decline in the value of cream resulting from continuing weakness in demand for dairy commodities, exacerbated by substantially higher levels of milk production by dairy farmers around the world.
Martin Armstrong, Head of Group Milk Supply for Müller UK & Ireland Group commented:
“We will continue to invest heavily to add value to farm-gate milk, but we are not immune to the severity of the decline in the value of these globally traded commodities.
“Realisations from these products are now substantially lower and after a period of record milk prices, we have no option other than to reflect this in the farm gate milk price we offer.
“Despite the reduction, we believe that the price and proposition we offer non-aligned dairy farmers will continue to be one of the best available in the UK. Our standard price is ‘clean’ and not eroded by deductions for balancing, haulage, capital or membership levies.”
Roddy Catto, Chairman of the Müller Wiseman Milk Group, which represents dairy farmers who supply Müller said:
“Whilst we are disappointed with the scale of the reduction in milk price, the board and the company debated hard to come to an agreement, with both sides moving a considerable amount following lengthy discussions.
“Unfortunately, it is a reality that milk supply hasn't eased and markets are in free fall. As a board we will continue to work with the company to have constructive dialogue and understanding that neither the board nor the company like the volatility of the market we find ourselves in.”
Notes to Editors
DairyCo information on cream and butter prices published this week is here:
Müller UK & Ireland Group
Müller UK & Ireland Group is wholly owned by the Unternehmensgruppe Theo Müller. It has 19 sites nationwide and employs almost 6,000 people across four business units: Müller Dairy, Müller Wiseman Dairies, Müller Minsterley and TM Telford.
Based in Market Drayton, Müller Dairy is the UK's leading yogurt manufacturer, with major brands such as Müller Corner, Müllerlight and Müller Rice.
Müller Wiseman Dairies processes and delivers around 30% of the fresh milk consumed in Britain every day and is famous for its black & white cow-print branding. In December 2013, the business formally opened a major new state of the art butter-making plant in Shropshire, with the capacity to produce up to 45,000 tonnes of salted, unsalted and lactic butter each year.
Müller Minsterley is our facility near Shrewsbury at which chilled desserts including Cadbury Bubbles of Joy, Pots of Joy, Chocolate Trifle and Twin-pot products are produced under a license from Cadbury.
TM Telford is a state of the art yogurt production facility in Telford, Shropshire which is focused on the development of the company's presence in the UK private label yogurt market.
To make its range of dairy products, the company buys milk from more than 1,200 British dairy farmers, all of whom are Red Tractor Farm Assured.
Müller Wiseman Milk Group Dairy members elect a representative farmer board which works with the company to discuss milk supply issues, including the Group's commitment to maintain a competitive milk price and contractual position.