Co-op to Invest Nearly £1m in Dairy Farming with New Pricing Strategy

The Co-op is making a significant move to invest almost £1 million into dairy farming by adjusting the price it pays farmers, in alignment with prices set by dairy processing group Muller. A letter sent to Co-op’s dairy farmers on March 6 explained the forthcoming changes and highlighted the long-term supply agreement with Muller. This investment marks a shift from the previous basket pricing model that has been in place for nearly a decade, during which the Co-op delivered around £55 million in additional payments.

Matt Hood, Co-op Food’s managing director, underscored the importance of evolving the pricing model as part of the company’s commitment to supporting farmers. "By working closely with our British farmers, we recognize the industry's challenges and aim to alleviate some of these through increased milk pricing," Hood stated. Co-op Dairy Group chair Tom Bramall welcomed the price movement as a positive development, emphasizing the strong future cooperation and decision-making role for the CDG in light of the new contract with Muller.

The pricing model's evolution and the Co-op’s commitment to farmers will be further discussed at the committee meeting next week, outlining subsequent steps in the review.