The Milk Supply Association (MSA), the producer organisation supplying Lactalis, has successfully negotiated an agreement to be paid a minimum price for the whole of 2017, according to levy board AHDB Dairy.
The Fresh Milk Company (FMC), the milk buying arm of the Lactalis Group, has committed to a minimum milk price of 27.5ppl. The price will be linked to a market-related basket of prices, allowing it to rise above this minimum within agreed limits.
As part of the deal, an approach to volume management and milk production profiling will also be agreed between FMC and MSA. This will serve to balance milk production with demand and reduce the risk of price volatility.
The agreement has been praised by NFU Scotland as an example of the benefits of collaboration and strong farmer representation, resulting in providing producers with some confidence and clarity going forward into 2017.
Source – The Dairy Site