Tesco to pay 20% more for milk to help boost British dairy farmers

Tesco will increase the price it pays for all its fresh milk by close to 20% in a bid to provide a boost for British dairy farmers and help battle the “unprecedented” levels of on-farm inflation.

The 520 British dairy farmers that make up Tesco’s sustainable dairy group (TSDG) will benefit from a near 20% rise for every litre they supply the Big 4 grocer, with the price increasing from 24.16p per litre today to 40.84p per litre in May.

Additionally, TSDG farmers will also see an interim price rise in April.

The rise reflects the soaring cost of feed, fuel and fertiliser that dairy farmers are enduring.

Tesco set up the TSDG 15 years ago to tackle the uncertainty and volatility in the dairy sector, guaranteeing a stable price no matter what happens in the future, as well as ensuring they can plan for the future and invest in their farms.

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“At a challenging time for the agriculture sector in the UK, we’re pleased to be offering our dairy farmers a significant increase in the price we pay for our fresh milk,” said Tesco’s commercial director for fresh food, Dominic Morrey.

“Our farmers work incredibly hard to provide quality, fresh food to our customers, and we recognise the critical role they are already playing in helping to transform the food industry, as we tackle issues such as climate change and food security.”

TSDG committee chairman, Bill Higgins, added: “Tesco has stepped forward to help us adapt the TSDG model to better reflect and support us through these unprecedented times.”

The news comes after Arla Foods claimed milk supplies could run dry as increasing rates for dairy production have meant farmers could no longer cover their expenses.

As a result, dairy farmers are producing less milk with production down by 2% in February and 4% in March.

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