A PROMISE by Tesco to continue paying a cost-of-production milk price for cheese has been described as a “lifeline’’ by farmers supplying the First Milk creamery at Haverfordwest.

Since the end of September, the retailer has been paying the equivalent of 29.9 pence per litre (ppl) for the cheese that it purchases from First Milk farmers supplying the Haverfordwest factory.

This supplement, which farmers receive for their ‘A’ price milk, was due to end in February but Tesco agreed to extend the payment for another six weeks.

The payment is linked to Tesco's Sustainable Dairy Group cost of production model. It has varied from month to month, depending on the volume of milk supplied to the factory and the tonnage of cheese bought; in February it meant an additional 4ppl resulting, in a farmgate milk price of 22ppl.

Tesco has promised, given the wintry weather and the challenges being faced by First Milk farmers, that it will continue with the payment until April 17th.

Pembrokeshire dairy farmer Mike Smith, who sits on First Milk’s new Member Council, said the decision was an important one for suppliers. “It will help farmers to sustain their businesses through the worst market conditions since the 1930s.’’

Mr Smith said the farmers were very grateful to Tesco for its support. “Tesco is the only supermarket which has led the way on supporting cheese production from British milk,’’ he said.

He is hoping that Tesco might consider a further extension to the agreement. “We are doing everything we can to encourage Tesco not to walk away from the commitment they have made. The Haverfordwest creamery is not just important to the farmers supplying it but to the local economy as a whole.’’

Dilys Vaughan, who milks 500 cows on two farms at Tufton, described the payment as a lifeline. “It means everything and more,’’ she said.

Another producer, Geraint Davies, whose family runs a herd of 300 dairy cows at Wallaston Green, near Pembroke, said farmers were being rewarded for supplying Tesco with a quality product. “Tesco realises the importance of the continuity of the supply of quality milk for manufacturing purposes,’’ said Mr Davies. “Every dairy farmer is disappointed with the price of milk as it stands at present so every additional penny we are paid really counts at this moment in time.’’

Pembrokeshire dairy farmer and First Milk vice chairman, Nigel Evans, said Tesco had shown “real leadership’’ in agreeing to support its primary producers. “It is tremendous recognition that we have a great factory in Haverfordwest, processing great cheese,’’ he said.

“It is entirely in Tesco’s hands how it progresses on the supplementary payment but it would be a huge loss if it didn’t see its way to continuing with this.’’