First Milk Cheese Value Soars at ASDA

UK - ASDA has agreed that as of 1st August 2008 it will increase the price it pays First Milk for cheese by £300 per tonne.
calendar icon 29 July 2008
clock icon 2 minute read

Jonathan Betts, ASDA’s general manager for dairy commented: “ASDA has always been at the forefront of ensuring that dairy farmers receive a fair price. This £300 per tonne increase in the price we pay First Milk for cheese is aimed at reflecting farmers’ increased costs, and we will work closely with First Milk to monitor the market over the coming months.

"It is important that milk continues to go into making cheese – helping to keep a great British tradition and rural economies going."
Jonathan Betts, ASDA’s general manager for dairy

“Against the current market backdrop, it is important that milk continues to go into making cheese – helping to keep a great British tradition and rural economies going.

“We call on others in the dairy market to match this commitment to British farmers right now, especially when farmers’ costs have rocketed over the last few months.”

Jeff Halliwell, managing director of the First Milk Cheese Company which supplies all of ASDA’s own label cheddar commented: “In our conversations with ASDA they have not only demonstrated a desire to support the dairy sector in the UK, but have also now shown some clear leadership in raising the price they pay us for cheese. It was very important for ASDA that this price increase is passed back directly to dairy farmers, and as a farmer-owned business we can deliver that. ASDA has now set a benchmark on cheese price for others in the dairy sector to follow.

“We have been speaking with all our customers individually on the need to significantly increase the price they pay for raw milk and cheese to reflect farmers costs.”

However, Jim Begg, director general of industry association Dairy UK told that processors in mainland Europe did not appear to have the same problems in ensuring milk availability for their production. Begg stressed it was unlikely that other EU retailers would be raising cheese payments as a result.

"After falling away from the high prices seen in late 2007, EU cheese prices stabilised in April and have shown some signs of firming since then," he stated. "This is largely due to the seasonal decline in milk production causing a reduction in availability."

Begg added that UK markets were significantly different due to the falling value of sterling between April 2008 and August last year up, which helped maintain the price for some dairy commodities like Cheddar.

"In the end, the market determines the price according to the value it places on a product. Milk output has been dropping in the UK, driving some buyers of dairy products to increase prices to secure supply," said Begg. "That situation is not replicated in Europe."

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