Archive: Tesco reduces TSDG milk price

Published 25 September 14

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Tesco has confirmed it will reduce the milk price paid to its Tesco Sustainable Dairy Group (TSDG) farmers, following its bi-annual review of costs of production (COP), carried out by Promar. From 1 November, the headline milk price paid will be 32.01ppl (including 0.5ppl bonus for farmers sharing cost data with Promar).

According to the Promar Cost Tracker to September 2014, the reduced COP brings the current milk price down by 0.42ppl, compared with six months ago. Variable costs are 0.5ppl lower, primarily due to a reduction in the cost of feed, while depreciation is reported to be rising, reflecting increasing investment.

In its last price 6-monthly review (April 2014), the TSDG milk price was boosted to ensure the price remained in line with that paid to other suppliers of Arla and Müller Wiseman, who process the TSDG milk. With milk prices on non-aligned contracts now below the Tesco COP price, the additional payment has been taken away, resulting in a reduction of 2.19ppl for those farmers supplying through Arla and 2.29ppl for Müller Wiseman producers.