Dairy farmers in the United Kingdom can lock up a maximum of 3% of production over the next 50 years for a price of €34,77 per 100 kilos. This option offers Müller Milk&Ingredients, a British part of the German dairy giant Müller. The dairy is working with supermarket chain Lidl in offering this contract to its milk suppliers.
It is the second time that Müller has made such an offer to its suppliers in the UK. This should give British dairy farmers more financial security for the longer term. From 1 July 2021, dairy farmers can lock up a maximum of 50% of the milk volume for a certain price. The price of 29 pence per liter is based on current and expected market conditions.
The other 50% of the milk volume continues to be paid by Müller according to the standard variable line based on the prevailing market conditions. Müller and Lidl are working together in the United Kingdom in the so-called Grassroots Dairy Partnership programme, in which dairy farms are helped to reduce CO2 emissions on their farms. Muller has been the main supplier to Lidl in the United Kingdom for some time, both parties report in a statement.
Increasing interest
In the Netherlands, there is growing interest among dairy farmers to fix part of their milk production at a fixed milk price. This was revealed in a study by Boerenbusiness among more than 500 dairy farmers. This showed that especially the younger dairy farmers find the option of locking very interesting.
Besides the fact that it can potentially generate more money than a variable milk price, the financial security also provides a better basis for applying for financing from the bank. There is certainty of income, with which a plan can be set up.
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