Tesco Confirms New Milk Price
Tesco has today announced that it will continue to pay dairy farmers a consistently strong price for the milk it buys from the Tesco Sustainable Dairy Group farmer members.
The 800 farmer members of the Tesco Sustainable Dairy Group (TSDG) continue to benefit from Tesco’s pledge to recognise the true cost of production with additional provisions for making a profit including capital investment and un-paid family labour.
The new price continues to be considerably above the current market value and has been very well received by the dairy industry. Now entering its fourth year, the Tesco Sustainable Dairy Group was established to address the huge uncertainty faced by dairy farmers caused by continuing volatility in the markets, and ensure our farmers are paid above the cost of the milk production.
Tesco Board Director, Lucy Neville-Rolfe said; “The Tesco Sustainable Dairy Group has quickly proved to be a valuable and successful scheme for both dairy farmers and Tesco. It is vital for the long term future of the industry that farmers are able to invest and plan ahead.”
“It is heartening to see that since we launched the scheme many of our farmers have been able to do just this – we are seeing investment in farm expansions, new technologies and herd growth. This is great news for the industry and we remain committed to ensuring our farmers receive a fair price for the milk they supply to Tesco.”
Andy Bloor, Farmer Committee Chairman said; "We are now four years into the partnership with Tesco and this announcement re-affirms the long term commitment Tesco has to the TSDG Membership. We are operating in a volatile market but the relationship we have is providing the confidence and stability we need to invest in the future."
The cost tracker review ensures Tesco pays farmers on an accurate cost of production, including unpaid family labour and depreciation – rather than led by market forces. Since the programme launched in 2007, farmer members producing one million litres per annum have benefited by at least £62,500 over and above the average British milk price*. This equates to a total investment of £50,000,000 by Tesco.
Gwyn Jones, departing NFU Dairy Board Chairman, said: “Tesco’s arrangement with its dairy farmers has been a major influence in managing volatility in the UK liquid market, providing much needed stability. Tesco has not only honoured their commitment to pay a milk price based on the true cost of production, but has also invested in its dairy farmer suppliers and in research and development through the Tesco Dairy Centre of Excellence.”
Tesco farmers voted once again on the success of the Tesco Sustainable Dairy Group by Tesco’s regular survey with the farmers to understand how they felt the group was working for them. 83% of farmers surveyed think that their membership of the TSDG has had a positive influence on their future production plans with 93% believing that Tesco is committed to the TSDG. Finally, 84% also said that there is a high level of morale within TSDG farms right now.
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