January 31, 2008

Wiseman Dairies warns of milk price hikes

Scotland-based Robert Wiseman Dairies warned of impending milk price increases as the input costs of plastic and diesel continues to climb.

Company representatives said that if high costs persist in the coming days, they would need to raise the selling price to maintain operating margins.

Wiseman spokesman insisted no formal decision on pushing through price rises had been made although there have been serious talks about it.

The company, which processes around 1.3 billion litres of milk a year, also warned that the price it pays to farmers may also need to be cut, due to falling dairy commodity prices.

The group said full cream prices fell 23 per cent in the final quarter of 2007 to an average GBP1,080 (US$2,144) a tonne.

Currently, Wiseman's base farm-gate price is 25.7p per litre, which will be held in place until the end of January.

Despite the cost pressures, Wiseman said it is counting on a bumper Christmas period.

Furthermore, its new facility at Bridgwater in Somerset was brought into operation prior to Christmas. The plant is expected to reach full initial capacity of 250 million litres a year by April.