Good news for DFB members

Jun 30 2009 by Karen Dent, The Journal

A DEAL has been struck with Milk Link for the Dairy Farmers of Britain (DFB) members who have not yet found a new buyer, many of whom are based in the North East.

Receivers PricewaterhouseCoopers LLP (PwC) reached an agreement with Milk Link, which will provide a contract with a three-month notice period for the 143 DFB members still without a deal. They are mainly in the North East, Cumbria, North Yorkshire, Lancashire, south of Manchester and South Wales.

The new contract offers over 18p per litre, compared to the 10ppl the receivers were able to offer for collecting milk from those farmers without an alternative buyer.

PwC said the low price was due to high haulage costs and the need to sell the collected milk at commodity prices. Milk Link, which acquired the former DFB-owned Llandyrnog Creamery earlier this month, is able to offer a better price because of improved efficiencies and a larger milk field.

Stephen Oldfield, PwC’s agribusiness leader and joint receiver, said: “The PwC team, the DFB milk supply team and the member council have been working hard to solve the problem of the remaining DFB milk field.

“In the first three weeks of the receivership, 1,600 of the 1,800 farmers were able to find alternate buyers for their milk but there remained a rump of farmers that could not – mainly due to the remoteness of their location or the size of their herd.

“It is very good news that we have been able to find an alternative for those remaining farmers less than a month into the receivership and at a much improved price than we were able to offer. Farmers need to take independent advice before signing up but this is a real step forward.”

Will Sanderson, Milk Link corporate affairs director, said: “The provision of this contract, we believe, will provide those farmers without an alternative buyer, a much needed period of stability and a secure outlet for their milk. It will also allow them time to assess how they want to move forward in dairy farming.”

Those DFB members who do not sign a contract with Milk Link – which is effective from July 1 – will continue to have their milk collected by PwC but at the 10p rate.

DFB went into receivership on June 3 after a number of issues, culminating in the loss of its contract with the Co-Op. Its Blaydon Dairy, on which 600 jobs depended, was closed on June 12. NFU members with legal queries about the new deal can call the helpline on 0870 845 8458.