Tesco has announced that it will invest £6 million over two years in a new initiative that will support some British dairy farmers by paying them a 2p per litre bonus over the market rate for milk.
The retailer is set to launch the new Tesco Cheese Group (TCG) on April 17. It will guarantee those dairy farmers participating an above market price for the milk they produce for Tesco's British own-label Mild, Medium, Mature, Extra Mature, Red Leicester and Double Gloucester cheese. In return they must adhere to the Red Tractor assurance scheme, as well as additional Tesco welfare standards, to improve cow health and welfare.
The retailer says the scheme will deliver a fair and consistent pricing model for UK farmers, and will provide them with security and ability to plan ahead for the future.
The move builds on the success of the Tesco Sustainable Dairy Group (TSDG) which was established in 2007, and pays a market-leading price to dairy farmers who supply Tesco with milk to help them manage the economic volatility of the market.
Tesco's commercial director for fresh food, Matt Simister said: "It is our hope that up to 200 dairy farmers across Britain who produce milk for our British cheese, in addition to the 600 producing milk through the TSDG, can work with us in partnership to create a successful and sustainable future for their production."
Mike Gallacher, chief executive officer of First Milk said: "This new agreement we have concluded with Tesco is about establishing a long-term, progressive and sustainable supply chain partnership over the coming years. While the current context is hugely challenging in dairy, we need to continue to keep focussed on the long term ensuring that we put in place business models that can deliver for our customers, consumers and producers."
Market round-up
Messrs Craig Wilson Ltd sold 170 store heifers at Ayr on Thursday to a top of £1050 per head and 242.6p per kg to average £743.65 and 203.9p (-0.6p on the week), while 180 store, beef-bred bullocks peaked at £1100 and 244.9p to level at £807.11 and 208.9p (+0.2p). Sixty-three store, B&W bullocks sold to £1035 and 151.6p to average £652.54 and 132.3p (-6.1p).
C&D auction Marts sold 4006 prime hoggs in Longtown on Thursday to a top of £120 per head and 286p per kg to average 185.3p (-11.7p).
A smaller show of 2584 cast sheep saw heavy ewes sell to £154 for a Texel and average £90.53 (-£8.77), while light ewes peaked at £85 for Blackfaces and levelled at £55.22 (-£9.21). Rams sold to £150 for a Texel and averaged £99.91.
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