Tesco Confirms Improved Price for Dairy Farmers

Tesco today announced a boost for British farmers as it increased the price it pays its dairy farmers for their milk.

The 700 farmers who make up the Tesco Sustainable Dairy Group will now receive the new price of up to 32.77 pence per litre from 1 April 2013 – one of the highest prices paid by any retailer for milk.

In a further commitment, Tesco will be offering a £40 bonus payment for every Aberdeen Angus calf produced by TSDG farmers from their dairy herd, using specially selected sires. The high quality, 28 day-aged meat will be available as part of Tesco’s Finest range of beef in the future.

The £1million investment represents a significant extra income for TSDG dairy farmers, with the payments available for all Aberdeen Angus calves born between January 2014 and January 2015.

The payments are being offered to increase the number of Aberdeen Angus cattle in the UK following the retailer’s commitment to source all their Finest range beef from the Aberdeen Angus breed.

John Scouler, Tesco Commercial Director said: “Since its launch in 2007, the Tesco Sustainable Dairy Group has led the way in guaranteeing farmers a fair price for their milk and has ensured stability and investment during a period of volatility for the industry as a whole.

“This increase in price and our investment in Aberdeen Angus beef not only demonstrates our commitment to British agriculture, but also means we can offer our customers some of the best produce British farmers have to offer.”

Andy Bloor, dairy farmer and Farmer Committee Chairman said: “The Tesco Sustainable Dairy Group was established in 2007 to address the uncertainty faced by dairy farmers caused by the dramatic volatility in the markets, providing much needed stability. The Tesco Fair Price Guarantee continues to pay TSDG farmers a milk price that secures confidence and the ability to plan and invest in their business for the future.”

The price covers every litre of Tesco own label fresh milk, with the exception of Organic milk. Tesco is the only major supermarket to guarantee that its milk is 100% segregated, meaning that consumers can be assured that every litre of own-brand milk they purchase has come from a TSDG farmer.

The new level takes into account an increase of 1.19ppl in the cost of production from 31.58ppl to 32.77ppl primarily driven by the increase in the cost of feed and the significant drop in the volume of milk produced as cows react to the extreme weather. The bad summer weather of 2012 continues to impact on the price of feed around the world.

Since its creation, Tesco has invested £165 million into the Tesco Sustainable Dairy Group and in paying above-the-average price to farmers.

ENDS

Notes to editors

-An independent review of the price paid to TSDG farmers is carried out every six months by Promar, the UK’s largest agricultural and agri-food consultancy.
-TSDG members who receive the 0.5ppl Promar supplement will receive a standard litre price of 32.77ppl effective from 1st April 2013.
-TSDG members not participating in the Cost Tracker will receive a standard litre price of 32.27ppl effective from 1st April 2013
-The commitment of TSDG is further reinforced by Tesco’s work with Liverpool University through its ’Dairy Centre of Excellence’. This exclusive agreement brings together the dairy sector to look at issues from animal welfare to consumer trends. In January 2008 we also launched a visitor centre which is a national resource point for schools, farmers and dairy industry experts.
-Tesco launched the Tesco Sustainable Farming Groups for beef and pork farmers in November 2012 with aim of offering beef farmers an above market price for their meat and a price linked to feed for pork farmers.
-Farmers were given direct contracts with Tesco lasting up to 36 months, giving livestock farmers more security, the ability to plan ahead and a guaranteed fair price for their meat.


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