Farmers supplying Scotland’s largest privately owned dairy business – Graham’s The Family Dairy – will embark on a new milk pricing formula at the beginning of next month.
The Bridge of Allan-based firm will start its new AB formula contract on February 1.
The contract, which will be adopted by all of the company’s suppliers, aims to pay farmers two different prices for their milk.
Speaking to the Press and Journal yesterday, managing director Robert Graham said 90% of all suppliers’ milk would be paid the full liquid price, while 10% would be paid based on an AMPE derived price. The firm’s standard litre price, as of January 1, is 26.5p a litre.
AMPE, or actual milk price equivalent, is a value devised by dairy levy body DairyCo based on the market prices for butter and skimmed milk powder.
Mr Graham said the formula would allow the company to pay farmers the best price possible because it would help ensure they received the right amount of milk that they needed.
“We need the same amount of milk every day, broadly speaking, and we want our producers to try and work with use to do that,” added Mr Graham.
In March last year, Graham’s revealed it was struggling to meet demand for its premium Jersey range due to a lack of raw product.
Mr Graham yesterday said the company had since worked with a number of producers, both existing and new, to help them convert to Jersey cows.
The hunt was now on for direct organic producers, said Mr Graham.
“We are speaking to some of our own producers and others about potentially converting and how we can work with them during the conversion period,” he said.
At present, none of the organic milk supplied to the firm comes from direct suppliers.
Last year the business submitted a planning application for a new £20million dairy in Stirling.
In conjunction with housing developer Mactaggart & Mickel Homes, the dairy submitted planning for the Airthrey Green development which will include a public park, primary school, improved local road network, 600 houses, retail and leisure centre and a new dairy facility.
The firm said the new dairy would include a product development research facility and create 450 new jobs.
Mr Graham said a decision on the planning application was due in the first half of this year.
“It would be a significant step change in investment in our business and the dairy in