A report in the Farmers Guardian says that dairy products manufacturer Muller, based in Market Drayton, will reduce their price to milk producers by 0.5ppl from February 1st.
The company has written to producers telling them that, following tough trading conditions and a generally disappointing 2011, it needs to achieve a more competitive costs base and hence the need to reduce the producer price.
Milk procurement manager Andrew Gaskell said the cut would leave the firm’s single contract, standard litre price around the 28.9ppl mark.
Meanwhile, the Dairy Group director Nick Holt-Martyn is warning even with stable market returns through the early part of 2012, currency changes could introduce instability to farm gate prices.
However if the eurozone were to become more stable and Sterling to remain weak due to low domestic growth, then the prognosis is for stable farm gate prices for the next six months or so. “After that all bets are off with the potential for markets and exchange rates to move in tandem or in opposite directions.
“All things may change as we hit the spring flush but for now the market signals are stable,” he says.