Dairy Crest, the leading British dairy company, has announced a price reduction of 1.25 ppl for farmers on standard liquid contracts from 1 July but has confirmed that the price paid to farmers on its Davidstow cheese contract will remain unchanged.

The liquid price move reflects market conditions, with high levels of production and reduced dairy market returns. The revised price will be 31.2* ppl. This price move is less and later than competitor reductions. Farmers have also been provided with 30 days’ notice of the change in line with the Voluntary Code of Practice.

Holding the Davidstow price of 33.2* ppl means that Dairy Crest has delivered price stability for the past 9 months and this leading contract continues to be an attractive offer to farmers in the South West.

Mike Sheldon, Dairy Crest Group Procurement Director, said:

“The reduction in the price for our standard Liquid contracts reflects the lower returns from our markets following a period of record milk production. I recognise a price decrease is disappointing for our farmers but we have delivered on our commitment to strive for stable pricing by adjusting the price by less and later than our competitors."

“I’m confident that we have a compelling package for our farmers, offering flexibility and choice and a comprehensive farm support service. From July we will be offering a further volume of milk priced according to our innovative Formula contract options. Also, all farmers supplying Dairy Crest continue to benefit from their milk not being subject to capital deductions or other hidden costs."

"I am pleased to deliver further stability on our cheese price for Davidstow farmers. As our successful Cathedral City and Davidstow cheese brands continue to grow, we need more milk for our Davidstow Creamery."

“I believe the British dairy sector has a bright future. Investment projects such as our £45 million demineralised whey plant at Davidstow will open up new global markets for us and our farmers.”

David Herdman, Chairman of Dairy Crest Direct said:

"The pressure on all milk pricing from falling market returns is clear. Maintaining the Davidstow price at the current level for July is therefore very welcome. Any price reduction is disappointing but we'll continue to work to ensure a competitive Liquid contract price for DCD members."

- Ends –

For further information please contact:

Mike Sheldon, Group Procurement Director 01372 472351

Olivia Seccombe, External Communications Manager 01372 472249

_{* Prices expressed on a standard litre basis, according to milkprices.com}