Tesco is to increase the price it pays its dedicated group of farmer suppliers for their milk.
The 1.02p rise to 33.79p a litre (19.19p a pint) applies from November 1, and is based on independent analysis by agricultural consultants Promar.
Tesco said the improved price reflected increased feed costs faced by its 700 direct farmer suppliers, members of its Tesco Sustainable Dairy Group (TSDG).
It also said poor winter and spring weather continued to affect volumes of milk.
Commercial director John Scouler said the price improvement reflected the retailers’ commitment to recognise the true cost of the production of milk and pay a rate in excess of that.
TSDG farmer committee chairman Will Hosford said: “Despite the good weather we’ve experienced this summer, the dairy industry continues to feel the effects of the extreme weather at the start of the year and the market remains volatile.
“The security and confidence that Tesco provides farmers through the TSDG is more important than ever as we look to prepare for winter.”
TSDG members who do not submit figures to Promar will be paid 33.29p a litre (18.9p).
