Tesco has announced that it is to slash 2.19p per litre (ppl) off the price it pays its Tesco Sustainable Dairy Group (TSDG) members for milk, leaving them with 32.01ppl from November 1.
The new price is based on an independent cost tracker review, and is still well above the price other processors are paying. Tom Hind, Tesco Agriculture Director said: "Over the past seven years we have worked in partnership with our dairy farmers to deliver a fair price for their milk. By agreeing a clear price, based on costs of production, for a period of six months, we are able to offer our farmers real stability and confidence in a changeable market."
Following Tesco's announcement, Arla Foods Amba announced a further cut to the price of its standard litre of 1.67ppl to 28.55ppl from September 29.
Ash Amirahmadi, head of milk and member services said: "Globally, milk production has increased by circa four to five per cent, which is out of sync with a lower increase in global demand of circa one to two per cent.
"This imbalance is resulting in large stocks and, as a consequence, markets have dropped sharply. Furthermore, Chinese demand continues to be sluggish and the Russian import ban is continuing to have an impact on European industry prices. This negative pressure is having a significant effect on Arla's milk price."
Meanwhile, NFU Scotland is reminding employers to ensure that they have an up to date contract of employment in place for employees.
The plea came on the day that the Scottish Agricultural Wages Board (SAWB) announced new minimum wage rates for the sector.
The NFU has been working with members where, had employee contracts been up to date disputes may not have arisen.
SAWB confirmed this week that the minimum rate of pay for agricultural workers with more than 26 weeks continuous employment will increase by 15p per hour to £7.14 from 1 October, 2014 - bringing the minimum wage for a 39 hour week to £278.46.
Market round-up
United Auctions sold 635 store heifers at Stirling on Wednesday to a top of 236.1p per kg and an average of 214.7p (+2.1p on the week), while 880 store beef-bred bullocks peaked at 273.2p and levelled at 222.2p (+0.2p).
One-hundred-and-fourteen store, B&W bullocks sold to 160.3p and averaged 146.9p (-3.4p).
In the rough ring 209 cows averaged 117.2p. The firm also had 5,306 store lambs forward.
Top prices and averages: Suffolks to £59.50 and averaged £55.23 (+65p on the week); Texels £57 and £56.20 (+33p); Mules £56.50 and £51.48 (+60p); CheviotXs £54.50 and £41.45 (-£5.62), Blackfaces £60 and £42.24 (+£1.51).
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