FDBusiness.com

The ground-breaking contract will provide a simple, more transparent formula method of establishing milk price movements and is available to all farmers supplying Dairy Crest on standard liquid contracts.

The formula price mechanism has been developed by independent consultant Stephen Bradley, a well-known and respected figure within the dairy sector. Stephen was jointly appointed by Dairy Crest and DCD. Both parties believe the formula will take some of the heat out of milk price negotiations and put Dairy Crest?s relationship with its farmers on a more secure footing.

Dairy Crest Group Procurement Director, Mike Sheldon, reported that there had already been a significant level of interest in the formula. “I am delighted that our farmers have welcomed the development of a formula based contract. We have received some very positive feedback from our recent series of farmer workshops.

“As the number one UK-owned dairy company, Dairy Crest is committed to supporting and working closely with our British dairy farmers. The formula is a great example of farmers and processors coming together to make the production of British milk more sustainable.”

DCD Chairman David Herdman echoed these views. “Developing this joint formula with Stephen Bradley has been a really valuable process. The formula provides a fair and transparent process that is related to both the market and on-farm costs.”

The application process will start later this month with farmers being able to choose to place either all or part of their milk supply volume on the formula contract.