Given that prices for milk and cream are rising again, one might wonder if Dairy Crest is regretting its decision to get out of milk production, selling its dairies business at the end of last year to concentrate on its four key brands and the new business of making ingredients for baby formula from byproducts of making cheese.
The company has had to raise the amount that it pays to farmers for milk. Meanwhile, the price of cream has doubled since the summer. There are upsides from both, however.
First, as the price of milk increases, so does that of demineralised whey, the byproduct that Dairy Crest sells on to its global partner, Fonterra, for baby food. With the cost of production fixed, that price