Milk markets: Will 50p/litre lead to increase in production?

摘要

The news that Freshways is aiming to be the first processor to pay its producers 50p/litre, starting in September, has raised eyebrows across the industry this week.If achieved, the price - for a standard liquid litre of 4 butterfat and 3.3 protein - will be an increase of 5p/litre on the company's July figure.Bali Nijjar, managing director at Freshways, said there were many reasons behind the decision, such as farm production costs being unlikely to reduce in the short term, commodity prices being at a level that commands this price, and the spot price for August looking to be about 50p/litre.