Saputo Dairy issues 12-month notice to 13 dairy producers affecting 20M litres of milk

CANADA – Saputo Dairy has served a 12-month notice to 13 dairy producers in the South West, a move that will see over 20 million litres of milk seeking a new market. 

Farmers Weekly reported that the affected farmers were all part of the Davidstow milk pool, contributing to approximately 3.5% of the processor’s total Davidstow volume. 

The company did not publicly disclose the reasons for terminating the contracts but confirmed that the affected farms had been informed individually.

A spokesperson for Saputo Dairy UK stated that the decision was not made lightly but was necessary to ensure the future sustainability of its milk pool. 

“Saputo Dairy UK has recently made the decision to serve notice on a small number of our Davidstow-supplying farms,” the spokesperson said.

 “This is not something we have taken lightly; however, it is a necessary thing to do for the business as we seek to ensure our milk pool is fit for the future.” 

The company assured that support would be offered to the impacted farms during the notice period and expressed appreciation for its supplying farms and the quality of milk they produce.

The development comes at a time when the dairy sector is undergoing further consolidation, with the number of dairy producers in Great Britain declining to 7,200 as of October 2024.

Despite this, milk supplies have remained about 3% higher year-on-year in January, and the expected increase in volumes during spring could exert additional pressure on farmgate milk prices.

Saputo Dairy UK, previously known as Dairy Crest, was acquired and rebranded by the global dairy processor Saputo in 2019. 

The company is a major player in the UK dairy industry, producing well-known cheeses and dairy products.

The decision to serve notice has drawn criticism from the Dairy Crest Direct (DCD) producer organization, which represents farmers supplying Davidstow Creamery. DCD chairman Richard

Thomas voiced disappointment over the move, stating, “We are pretty upset at the decision to give notice to a number of our members. We will support those members in any way we can.”

He added that the organization had not been involved in Saputo’s decision-making process.

The affected farmers now face the challenge of finding alternative buyers for their milk within a competitive market. 

With farmgate prices already under pressure, the impact of these contract terminations could extend beyond the individual farms to the wider dairy supply chain.

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