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Increased milk payment boost to Westcountry farmers

By Western Morning News  |  Posted: March 23, 2013

Dairy farmer
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An increase in payments of nearly 1.2p per litre for milk, announced by supermarket giant Tesco, has come as encouragement to beleaguered dairy farmers in the Westcountry.

The increase, of 1.19p, applies only to farmers signed up to the supermarket's own producer group, the Tesco Sustainable Dairy Group, and takes payment for a litre to 32.77p. It applies from April 1.

Other farmers selling to Tesco will receive 0.5p less, or 32.27p per litre.

Tesco says the increase reflects continuing higher feed costs, the need to use more concentrate feed because of the ongoing bad weather, and because of lower milk volumes. The higher payments have been calculated using the Cost-Tracker Formula run by Promar, a major farm and agri-food consultancy.

Other supermarket chains have also increased payments to producers since the New Year.

The dairy industry has generally regarded 30p per litre as a make-or-break payment, but many commentators believe 40p would be far more realistic.

In the last farming year, to the end of September, dairy farmers' profitability fell by almost 13%.

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