1ppl Milk Price Reduction for Suppliers to Lanchester Dairies Producers claim is a Contract Breach

Given the strength of March markets, the jaw dropping 1ppl milk price cut for suppliers to Lanchester is brutal and allegedly, takes producers April standard liquid litre price to under 25ppl making it one of the lowest and potentially the lowest farmgate price in the UK. 

It’s a fact the April 1st price  gap between the best at over 30ppl  predominantly driven  by Arla and the bottom, now at under 25ppl, is worryingly wide and getting wider. A 20% price gap means someone is likely to exit the industry this year the only question is will that be a processor or farmers.

AHDB Diary have re confirmed that “bulk cream prices climbed steadily” as have SMP and butter prices (+9%). Bulk cream prices up 10.2% on the previous month. 

The 1ppl reduction was communicated to Lanchester farmers on the 22nd March, only 9 days before this takes effect on April 1st. Farmers supplying Lanchester claim their contract states, the dairy will give producers a minimum of 30 days’ notice of any price change for any milk supplied which is not on a fixed price contract. If that is correct, and the aggravated farmers can find an alternative milk purchaser, it could be a quick exit for some as Lanchester realises that farmers will only take so much abuse. 

Finding a new milk buyer could be a challenge especially in the flush but for sure if the above is accurate the sooner a new statutory code is introduced the sooner Lancasters remaining producers will feel they are having fair treatment and respect.