Milk price cuts u-turn (From Western Telegraph)

Milk price cuts u-turn

Milk producers supplying the Dansco cheese-making factory at Newcastle Emlyn have been told plans to cut their milk price have been abandoned.

Last November the mozzarella maker became the first milk buyer to announce a price cut for 2005.

The business, which sources milk from producers in Pembrokeshire, Ceredigion and Carmarthenshire, claimed its current price was no longer sustainable and the price would be reduced by 0.45p/litre from this month.

Producers on level and seasonal contracts would have received 17.73p/litre and 17.43p/litre respectively for a standard litre.

But that price cut decision has now been overturned with suppliers being told in a letter that the cut had been rescinded 'due to changes in staff'.

In a move thought to be related, the company's managing director, David Neill, has left the company.

A caretaker has been sent in by the company's Egyptian owners, and suppliers were called to a meeting at the factory yesterday (Tuesday).

There has been major expansion at the site in the last 12 months. Last summer, Carwyn Jones, the National Assembly's rural affairs minister, officially opened new production capacity which will allow the factory to make and shred 16,000t of mozzarella a year and develop sales of branded and value added cheese.

Developments at the creamery have attracted £1.7m of EU and assembly funding in the form of marketing and development grants.

It will also allow it to widen the product range it sells on domestic and export markets. Meanwhile support is growing across the dairy industry for a milk price cost initiative which aims to pass back at least 1.5p/litre more to milk producers.

The aim is to bill buyers 3p/litre more for all milk so that the money can be shared between producers and processors.

First Milk, the co-operative which the majority of Pembrokeshire farmers supply, said it was doing everything it could to make it happen.