0.5ppl May milk price reduction cancelled by Grahams Dairies

In a move other milk purchasers should take note of Grahams Dairies have rescinded their confirmed 0.5ppl milk price reduction, which took effect from May 1st.  This results in an above average producer standard liquid litre price of 26.75ppl for May deliveries.

In a letter to its suppliers, Grahams Dairies focus on the fact they are agile and that markets have strengthened.

So whilst others have retained their May milk price cut Grahams appear to have done the right thing by their farmers.  They could easily have gone down 0.5ppl for May and back up 0.5ppl for June and banked the difference.  The big question is whether rescinding price cuts will be permitted in the government’s new compulsory milk contracts, which removes milk buyer discretion and agility.  An idea of the contracts detail is anticipated very soon.

In the letter Grahams point out that actual deliveries to the dairy are currently running 3% below farmers forecast, which appears to be representative of the rest of GB and indeed Europe.  (See below)