UK-based dairy giant Dairy Crest and Dairy Crest Direct (DCD) are set to introduce a new formula-based milk contract to British dairy farmers from 1 April 2013.
The new contract will provide a formula method of establishing milk price movements and is available to all farmers supplying Dairy Crest on standard liquid contracts.
The formula price mechanism has been developed by independent consultant Stephen Bradley.
Farmers can choose to place either all or part of their milk supply volume on the formula contract.
Dairy Crest Group procurement director Mike Sheldon said: "The formula is a great example of farmers and processors coming together to make the production of British milk more sustainable."
DCD chairman David Herdman said: "Developing this joint formula with Stephen Bradley has been a really valuable process. The formula provides a fair and transparent process that is related to both the market and on-farm costs."
DCD is the farmer business that represents the majority of Dairy Crest direct suppliers.
