Tesco cost of production claim proves unpopular
Posted on: 26/07/22
Further to our posting on the 21st re the Tesco COP reducing by 0.32ppl predominantly due to reductions in the cost of feed farmers have failed to find any evidence to support this claim.
The fury amongst several farmers with both Promar and Tesco is clear because they can find no evidence to support a reduction in feed prices and neither can Ian.
Some have concluded it is the first warning shot from the retail giant not only to its Tesco producers but also to UK processors and the UK Dairy Industry that Promar/Tesco view the COP as coming down.
Just to be clear Tesco are mirroring the 46ppl Muller Direct price for July and August deliveries so they take the Tesco COP figure and put their hands in their pockets to top up to 46ppl.
The expectation is that a number of milk price increases will be announced this week and its a near certainty the Muller Direct price from 1st September will increase irrespective of what Arla do: By default, Tesco will continue to match the Muller Direct price whether they like it or not.
The big question is whether Arla will move up for August 1st because historically Arla have leap frogged 1st August price movements come what may in previous years.