Dairy Crest has today announced a 1.5 ppl increase from 1 June 2013 for farmers on standard liquid contracts.

This takes the Dairy Crest headline price to 31.5 ppl, on a standard litre basis.

This increase, which has been agreed with DCD, reflects the upward movement of dairy markets as a result of lower than usual seasonal milk production. These higher returns are also expected to be mirrored in increased milk prices for farmers on Dairy Crest's new Formula Contract over coming months.

Group Procurement Director Mike Sheldon was very positive about the company's announcement.

"We are pleased to be able to increase our Liquid milk price at this time. The start of the new milk year has not been easy for farmers and milk supply is not surprisingly becoming tighter. Markets are now responding and this upward movement will also be reflected in the milk price generated through our Formula Contract over the coming months."

The company has also announced a new enhanced Volume Incentive Scheme for the coming year for farmers on Liquid contracts.

Discussions continue with DCD regarding the milk price for Dairy Crest's cheese business.