Tesco cut TSDG milk price by 0.65ppl from Apr'12

Posted: 23/03/2012

TSDG suppliers have received letters today confirming that in line with the Promar cost tracker, their milk price is to be cut 0.65ppl from next month (April). The decrease takes our 'Flagship' standard litre—4%b/f & 3.3% prot. Bactoscans of 30,000/ml & SCC’s of 200,000/ml 1mltrs/yr on EODC—milk price for our Arla (before their 0.25ppl haulage charge) RWD, First Milk and Dairy Crest Tesco ‘Core’ producers down to 29.56ppl for those submitting cost data to Promar. Those not co-operating with supply of information receive 0.5ppl less at the cost bottle level of 29.06ppl. Tesco have taken the opportunity to remind TSDG suppliers their farm gate price continues to be based on the independent cost tracker, and has not been affected by either the recent falls in cream and powder markets, or retail price offerings.

In terms of the actual Promar Cost Tracker, Tesco explains it has continued to capture the cost associated with the TSDG Animal Welfare Code of Practice estimated at a yearly cost of 0.12ppl. Also, that whilst the tracker has allowed for a continuing rise in the cost of fuel, wages, rents, and fertilisers, the biggest cost—bought feed—should fall a little over the year with very high global wheat stocks, and increased global planting of wheat and maize. For the 6mth period to Sept’12 Variable Costs (Feed, Fertiliser, forage, vet, AI, bedding and heifer rearing) are put at 16.16ppl down 0.7ppl compared with the previous 2011/12 budget. Overheads (fuel, repairs, paid wages, power and water, office, rent, rates, interest and the sum of £51,033 (previous £50,106) for the value of unpaid family labour) is put 0.05ppl higher at 11.33ppl while Depreciation (reflecting increasing investment) remains unchanged at 1.57ppl all of which adds up to the minimum price of 29.06ppl.

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