Dairy Crest formula maintains 3.6ppl premium despite January reduction

Published 9 December 15

Dairy Crest’s (DC) liquid formula prices will reduce by 1.425ppl in January 2016, due to the agreed downward re-base of 1.6ppl combined with a +0.175ppl adjustment resulting from the monthly formula review.

Despite the base reduction, the liquid formula will still return 3.6ppl more to farmers in January than the standard liquid contract, based on the DC standard litre. In fact, over the last twelve months, the formula paid nearly 5ppl more than the standard liquid price on average (excluding formula early sign-up bonuses).

The formula price is calculated using a combination of input costs and market indicators, with producer organisation Dairy Crest Direct (DCD) involved in both the original set-up and ongoing revisions.

The negative re-base was agreed and announced in December 2014, giving farmers twelve months’ notice of the change. It effectively reverses the upward re-base from April 2014, taking the base back down to its original level when it was launched in April 2013. 

DC graph 9Dec15