Dairy Industry news and features

This page was last updated at 25th November 2015 (Press your refresh/reload button for the latest information)

Note all standard litre prices quoted are before seasonality, balancing charges, capital retentions or production incentive payments/bonus.



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Arla holds members milk price until the end of the year   (25th November 2015)

Arla will hold its member milk price at 23.04ppl until at least the end of December.


Crude oil down to $44 barrel   (20th November 2015)


1ppl milk price reduction for Blackmore Vale suppliers – backdated to 1st November (PRODUCER NOTIFIED)  (20th November 2015)

This takes producers’ standard litre to 24ppl (ww.milkprices.com)


0.086ppl milk price formula increase for Dairy Crest formula contracted producers – from December 1st   (20th November 2015)

This takes producers’ standard litre to 26.80ppl for those on simplified and core formula and 26.99ppl for those who signed with the extra premium in April 2014.  The upward movement is attached to the improvement in the cream price.


1.751ppl Muller Wiseman monthly retailer supplement   (20th November 2015)

Muller Wiseman’s non-aligned producers will receive an extra 1.751ppl on their October deliveries.


GDT auction prices fall for the third consecutive auction   (20th November 2015)

It’s certainly a roller coaster ride so far as GDT auction prices are concerned.


During four auctions in August, September and early October, the average auction price rose 56% but admittedly it came on the back of a disastrous run of 10 consecutive falls to all time records lows.  On the 6th October the average all products price was $2834.


Now GDT has experienced three consecutive falls pulling prices back 17.2% to this week’s average of $2345.


Notable price movements:


WMP                down     11% to average US $2148

SMP                 down     8.1% to average US $1851

Cheddar            down     5% to average US $2874


Note, the quantity of product on offer at this week’s auction was down 11.6% (3953 tonnes) to 30,044.


Glanbia Cheese boost volume bonuses   (20th November 2015)

Glanbia Cheese will introduce a welcome revised volume bonus schedule from 1st February and all deliveries will see a positive benefit other than anyone who produces less than 1,000 litres day where it’s no change to their bonus.


The bonus increases range from +0.05ppl for those delivering an average 1,000 to 2,499 litres day to +0.45ppl for deliveries averaging 20,000 litres plus each day making their new bonus +1.5ppl.


With friends like these who needs enemies?  (20th November 2015)

With Farmers For Action once again giving retailers a beating to try and get them to pay more money to farmers comes news this week that Morrisons has had a beating for (wait for it) paying more money to farmers via its successful Milk For Farmers brand.


And starting the beating was none other than the magazine which says it is “Working for Your Farming Future” i.e. – The Farmers Weekly. In an article on the 10th November Philip Case wrote that “A supermarket shopper has accused Morrisons of misleading the public over its premium milk brand.”  Note, only one complaint from a so called consumer!  He went on to write about something every Arla farmer has known all along, in that the additional money raised goes to all Arla farmers across Europe and not just to UK ones.


What he didn’t say was that all of Arla’s product revenues such as the brand giant Lurpak was also spread across UK farmers, and not just with Danish farmers where the product is made. He also printed (on line) the extensive exchange of emails from the shopper, who is Mr Brown from Derby, who has since confirmed he has lodged a complaint with the Advertising Standards Authority.


The story was then picked-up by The Sunday Telegraph on the 15th November, and subsequently by other news outlets, including the Farmers Guardian.


Thus, in one fell swoop through a wholly irresponsible piece of journalism that does nothing for any dairy farmer’s future, The Farmers Weekly has potentially compromised not only the Morrisons milk brand but other such schemes as well which could have put more money in farmers’ pockets.


With regards to the article in today’s Farmers Guardian it is more balanced than the very one sided view printed in Farmers Weekly.  However, I do take issue with their claim “The chain has received a barrage of criticism from farmers who said consumers had been ‘duped’ into thinking the extra money would benefit only UK producers”.  I don’t believe The Farmers Guardian hold sufficient evidence to back up the use of the words “a barrage of criticism” because one complaint is hardly a barrage.  Also, is the use of the word duped correct?


Morrisons have 11 million customers a week. One complaint = .0001% of its weekly shoppers. And the Farmers Weekly made a story out if it. Shameful.


No doubt all of this will give FFA’s protestors much to talk about as they wait on the picket lines in the cold until the early morning hours.  A sponsored coach trip and picket line outside FW’s HQ at Quadrant House, Surrey is now under consideration.


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What’s good for the Goose is good for the Gander  (20th November 2015)

On the 19th October this bulletin reported on the onset of dirty tactics against Morrisons Milk for Farmers brand, and reported on the Twitter activity from the Midlands milk company Nemi Milk, made by the feed company Independent Feeds Ltd. It accused the Morrison’s brand of misleading consumers and posted tweets comparing the brand and Arla to FIFA, and even sending Liz Truss messages about “someone milking British public emotions and the UK dairy crisis”. The milk is “shameful”, the marketing “ill-informed” and Arla is “a co-op who deliberately misleads”. It is a “#scandal”.


Since then a Richard Brown from Derby who “has a lifetime’s experience of farming” has admitted on Facebook that he has submitted a complaint to the Advertising Standards Authority over the milk (see above story with friends like these who needs enemies). Although it has not been proven yet, there is a strong suspicion that there is a link between Richard Brown and Nemi Milk’s / Independent Feeds boss Andrew Henderson, who denied on Twitter that he contacted Trading Standards. Whether they know each other or not really doesn’t matter, however. Both clearly have a gripe that Milk for Farmers is misleading. The ASA will no doubt rule over time whether the brand or the marketing is, or isn’t.


Mis-representation or elaboration of any facts surrounding a product would, of course, be the last thing that anyone in the industry would want.


To that end, therefore, Ian is now questioning the credentials on which Nemi Milk is marketing its milk as “Britain’s First Natural Antioxidant Plus milk” and milk that is “naturally enriched with selenium”.


Under EU rules all health claims on food products have to be approved by the EU, of course. Currently claims for antioxidant properties are not-authorised, which makes Nemi’s claim somewhat, er, suspect. For selenium a claim may only be made where the increase is at least 30% compared to a similar product.


Needless to say the necessary investigations have been out in train to make sure that the claims Nemi Milk is making also do not mislead consumers. If they do then that will naturally also have to be a matter for… The Advertising Standards Authority or Trading Standards to investigate. After all, what’s good for the goose is good for the gander!









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With friends like these who needs enemies?   (17th November 2015)

With Farmers For Action once again giving retailers a beating to try and get them to pay more money to farmers comes news this week that Morrisons has had a beating for (wait for it) paying more money to farmers via its successful Milk For Farmers brand.


And starting the beating was none other than the magazine which says it is “Working for Your Farming Future” i.e. – The Farmers Weekly.  In an article on the 10th November, Philip Case wrote that “A supermarket shopper has accused Morrisons of misleading the public over its premium milk brand.”


He went on to write about something every Arla farmer has known all along, in that the additional money raised goes to all Arla farmers across Europe and not just to UK ones. What he didn’t say was that all of Arla’s product revenues such as the brand giant Lurpak was also spread across UK farmers, and not just with Danish farmers where the product is made. He also printed (on line) the extensive exchange of emails from the shopper, who is actually believed by some to be a disgruntled farmer with a vendetta against Arla. The story was then picked-up by The Sunday Telegraph on the 15th November, and subsequently by other news outlets.


Thus, in one fell swoop through a wholly irresponsible piece of journalism that does nothing for any dairy farmer’s future, The Farmers Weekly has potentially compromised not only the Morrisons milk brand but other such schemes as well which could have put more money in farmer’s pockets. Note, the expectation is that the new brand will add £5million to farmers milk payments by the end of December.


Morrison’s has 11 million customers and just one complains and then goes to The Farmers Weekly and they make a story out of it.  Shameful. 


No doubt all of this will give FFA’s protestors much to talk about as they wait on the picket lines in the cold until the early morning hours.


1ppl milk price reduction for suppliers to Barbers Farmhouse Cheese – From 1st December   (6th November 2015)              


1ppl milk price reduction for suppliers to Wyke Farms – From 1st December  (6th November 2015)

This takes producers’ standard litre (www.milkprices.com) to 22.05ppl and on the manufacturing standard litre 22.81ppl.


1ppl milk price reduction for suppliers to Belton Cheese – from December 1st   (6th November 2015)

This takes producers’ standard litre (www.milkprices.com) to 22ppl and on the manufacturing standard litre 22.75ppl.


GDT results are a rollercoaster   (6th November 2015)

This week’s auction saw all prices pulling back significantly compared to those recorded only two weeks ago.  The average all products price fell on eye-watering 7.4% with all commodities falling between 5% to 11%.  It’s certainly a rollercoaster and further confirmation that this is going to be a long drawn out road to recovery.

Key price movers were:-


WMP                down 8% to average $2018 tonne

SMP                 down 8% to average $2453 tonne

Butter               down 5.6% to average $1844 tonne

Cheddar            down 4.6% to average $2987 tonne


Dairy Crest half year results are not rosy   (6th November 2015)

Dairy Crest has released its half year results to the 30th September and the city reaction was to mark its share price down by 13p from a previous close of £6.43 to £6.30.


Key numbers were:


                                                2015                             2014                 Change

Sales                                        £203.8m                        £215.3m            -5.3%

Adjusted Profit before Tax           £16.0m                         £25.7m             -38%


Nett Debt Increased                   £242.3m                        £209.6m            +16%


Liquids division (soon to be sold to MW) recorded a £16.7m pre tax loss compared to £2.5m loss in 2014


Tesco reviews will result in casualties and opportunities   (6th November 2015)

The Tesco Sustainable Dairy Group (TSDG) have completed their review of the milk purchasing scheme the result means opportunities for the best and casualties in terms of the loss of their TSDG contract for the poor performers.


One of the key outcomes is that in future all TSDG producers will be core producers with no seasonal producers and all will be measured and rated annually on a traffic light system.


Those who fall into the bottom 5% as the worst performing suppliers in terms of animal welfare standards, milk quality, environmental management, carbon foot printing and generally engaging with their customer Tesco will be given six month notice of contract termination.


Once notice is served there will be a three month period when Tesco will support these farmers in an attempt to improve their performance and score rating. If, after that period, they have not achieved the required standard they will be axed three months later.


Conversely the top performing 5% will received an extra 100,000 base litres of production allocation, which will be an annual award with the extra literage predominantly coming from suppliers who exit as Tesco suppliers either voluntarily or who are axed.


Tesco’s two key liquid suppliers Arla and Muller Wiseman will now compile a waiting list for the 150 new core producers who are required. The list will be evaluated on a combination of geographical location and a score card. Whilst current Tesco seasonal producers (estimated to be circa 300) have a slight advantage in getting onto the waiting list many will fail the geography test and the expectation is that completely new TSDG suppliers will be required to make the numbers up. In addition, a Tesco young/new entrant reserve pool will be created.


Participation in Promar costings could be considered optional in terms of, if you don’t want to participate in the costings you are free to supply another buyer but not Tesco.  So it’s compulsory for Tesco suppliers and whilst the 0.5ppl payment towards Promar will be stopped it will be replaced by a standardized payment/subsidy per farm.


COP budget prices will change from twice a year to four times/every quarter so far as the three F’s are concerned.


Tesco utilize a QVIS (Quality, Value, Innovation and Service) score card as a transparent measure to rate all its suppliers and now it will be tailored to dairy.


Finally, the processor price matching clause is to be removed from the contract in the event the non aligned price eclipses the TSDG price.


The idea is to bring the bottom up for those who want to engage. It won’t all kick off overnight but 2016 will be when the starting whistle is blown by Tesco and a league table of producers will be created. Those in the relegation zone after one year will drop off unlikely to be offered a second chance as will those who refuse to provide Promar with their costings. 


Overall most farmers will realise it’s time to put up or exit as Tesco suppliers if they can’t achieve the standards.

We have asked a handful of key questions about the new ideas to Tesco to which we await a response which we will report back on.


24 hours in the life of David Handley from Praise to Police  (6th November 2015)

Farmers for Action founder members David & Marilyn Handley have been threatened and intimidated by a 35 year old Staffordshire dairy farmer who also claims to be a spokesperson for breakaway group United Action for Real Farmers.


The threat came by text message and whilst it was a long text the relevant sentence read:


“……. I will be in your yard within hours to ram them where the sun does not shine” The threat was in relation to retired FFA Committee member Paul Rowbotom who it appears is central to the breakaway groups organisation.


During recent weeks the Handley’s have been the subject of a number of playground taunts on social media from the breakaway group but now at least one has turned to threatening behaviour.


It’s similar to the 1970’s when, in football, we had small groups called “firms” who were convinced they were the best supporters and anyone who got in their way got a good kicking.


Only 24 hours earlier the Handley’s were a topic of conversation around a table of dairy industry leaders where Marilyn Handley was once again referred to as the unsung hero of the  UK dairy industry and David was congratulated for what he and his FFA team & committee had achieved with retailers in recent months.

Let’s be honest if you were David Handley you would be asking do I really need this sort of aggro from a handful of Mavericks who by their own admission were not very long ago staunch supporters and admirers of his efforts. Many would say stuff this and walk away.


We have the contact details of the farmer whose mobile phone was used to send the text as do the Police and we are hoping it was sent without thinking. We contemplated exposing the details but at this stage it would only fire up more trouble for those involved.


 If you have any comments email us so we can gauge the responses because threats of violence we believe cross the line.  In addition we understand the farmer’s   milk purchaser is likely to be questioned as to whether it condones this behaviour and whether such threats are a breach of his milk contract.  If the farmer involved wants to communicate his thoughts   we are happy to listen to his version. Alternatively consideration of an apology wouldn’t be out of place if he feels one is appropriate.

Retailers will be laughing their heads of at the fact our most passionate dairy farmers who want to make a difference are squabbling and posting inappropriate messages on social media about the Handleys. Come on lads Handley surely can’t be the enemy. It’s a sad state of affairs.


Scottish dairy farmers to give their views on repatriation of AHDB dairy levy  (6th November 2015)

Following on from a lively well attended dairy meeting organised by Mole Valley and SNFU in Coylton this week, the suggestion to poll farmers views at the Agriscot event on 18th November regarding repatriation of Scotland’s producers AHDB dairy levy is on the card.


Northern Ireland’s dairy farmers do not pay the AHDB levy, however, they do pay a levy for milk promotion, which is topped up by milk processors.  Whilst AHDB would argue that repatriation of the levy money wouldn’t raise enough money the fact is in Northern Ireland they still succeed in raising and spending more money for milk promotion than AHDB do in the whole of Great Britain.


Speaking at the event, industry journalist Chris Walkland emphasised the great story there is behind the Scottish Dairy brand and believes Scotland should sell its brand by adopting the NI model, with money coming from either a new separate promotional levy or by having promotion money coming out of repatriated AHDB levies. "Where the money comes from is one for Scottish farmers to decide on," he said.


A straw poll by the meetings Chairman of the dairy farmers in the room showed that when asked “how many of you believe AHDB do a good job and are value for money?” Not one hand was raised.


Gaff of the week goes to Oliver McEntyre, Barclays Bank National Agricultural Specialist   (6th November 2015)

Thank you to the readers who were keen to alert Ian to a quote in the latest Holstein UK Journal/Newsletter.


The Barclays National Agricultural Specialist stated


 "From high input high output systems to low input low input milk from grass systems, large herds to smaller ones, from the uplands to the lowlands, the cost of production reaches towards 20p/litre in some cases."


So with the current Tesco COP over 30ppl, is this not simply and extremely unhelpful comment?  Was this 20ppl a typo or for real?


China’s ending of its one child policy is big news for world dairying  (6th November 2015)

China has announced its one child policy will end and with it comes the expectation that up to 2 million extra babies will be born every year leading to an estimated 10 to 20% boost in China’s demand for infant formula as produced by the likes of Dairy Crest and Arla.  The move from the one to two child policy will happen in March 2016.


For Sale – ends this Sunday (8th November) at 8pm


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0.75ppl milk price reduction for Glanbia suppliers – from December 1st   (30th October 2015)

This is likely to result in a standard litre price of 20.6ppl.

Glanbia have also announced a review of their volume bonus schedules to apply from April 1st. One or two emails to Ian have suggested that in the current environment a review means a negative adjustment. This is a bold and negative assumption and is by no means automatic.


0.6ppl milk price reduction for Dairy Crest Davidstow suppliers – from December 1st   (30th October 2015)

This takes producers standard litre price to 23.24ppl (www.milkprices.com).  Note, this reduction comes with a guaranteed price floor until 29th February so no reductions for at least three months.


0.58ppl milk price reduction for First Milk cheese contracted members – from November 1st   (30th October 2015)


SMP Intervention almost dried up    (30th October 2015)

SMP going into Intervention continues to decline.


A total of 3,116 tonnes entered Intervention in the two week period straddling August and early September and now it’s down to 417 tonnes from France and Lithuania.


The UK has placed 1048 tonnes of the total 23,371 tonnes put into Intervention with the last consignment from the UK in early August.  EU wholesale commodity prices are gradually trending north, which will be the key influencing factor.


Arla UK report losses of £88m    (30th October 2015)

First Milk certainly aren’t the only UK processor to report losses.  Arla Foods UK division clocked up £88million in losses in 2014.  Note, that is across a 12,700 farmer pool (of which 3,000 are in the UK) who supply 13.5 billion litres (UK share 3 billion litres).  So on a ppl basis it’s tiny.


New Zealand milk production   (30th October 2015)

New Zealand has now passed its peak production and nationally output is plummeting with September down 7.2% on September 2014.


Glanbia is unlikely to be good news   (30th October 2015)

Glanbia has announced the temporary closure of its state of the art Kilkenny powder plant, which was officially only opened in March.  The milk will now be diverted into one of its cheese plants.  The move is due to low returns on powder and anticipated better returns on cheese.  This means up to 3 million litres of milk/day is now going into Irish cheese although production is much lower and the plant can be used on a seasonal basis, which could be a factor in the shut down.


Let’s hope the move does not result in any more Irish cheese landing at our ports.


First Milk AGM  (30th October 2015)

Surprisingly the number of First Milk members who attended yesterday’s AGM was similar to numbers attending in previous years and certainly estimated to be under 40 actual member producing farms.


Another surprise to some was that none of the existing farmer board tendered their resignations or announced they will stand down when requested to do so.  However, some are almost certain to recognise they have to shoulder part of the responsibility for the mistakes made and follow Chairman Sir Jim Paice with dignity rather than believe they are candidates for re-election to the new board, which desperately needs commercial experience.


There will be an SGM in December to adopt the new governance proposals following which First Milk aim for a new slimmed down board to be in place for 1st February.


At yesterday’s AGM a new farmer board member, Robert Craig, was elected as a non-executive farmer director and farmer Jim Baird was re-elected to a similar position.


Sir Jim Paice stood down as Chairman to be replaced by Vice Chairman, Nigel Evans, who stands in as interim Chairman.  So for the next three months and during the re-negotiation of the banking facilities the First Milk board is more farmer orientated than before, which must be a concern.  As one person commented Gallacher desperately needs a board focussed on the business not the farms and farmers.


The Great British Game Fair is born   (30th October 2015)

Hot on the heels of the announcement that after 57 years the CLA Game Fair had admitted defeat and closed its doors comes the welcome news that a new 3-day event at Belvoir Castle, Leicestershire will take place on 22nd-24th July.


For Sale   (30th October 2015)




14 VET    (30th October 2015)

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All of the articles below all relate to First Milk and were posted on our website earlier this week


First Milk’s Accounts and Annual Report are grim reading   (30th October 2015)

Ian takes little pleasure in writing about First Milk’s financial results. But its members will take no pleasure from seeing them.  On receipt of the accounts he faced two choices:

(1)   Take the easy route and skim the results saving a heap of time and money


(2)   Take a detailed look and report his observations and the facts as he sees them to his regular readers.  His conclusion was to go for option 2 mainly because he feels he owes that to readers, especially the FM members who find the delving challenging as well as depressing.  He won’t receive any Christmas cards from either the First Milk Board or Management but the details are there for members to study, and what is in the report needs to be aired.


Below are bullet points relating to the co-op’s accounts to 31st March 2015, which Ian has pulled together with limited commentary highlighted in blue.  Note, all comparison figures relate to the changes in the past 12 months. The detail is sobering, nay grim, and should stimulate significant discussion at the AGM this Thursday (29th). For those who want to check the facts Ian urges them to put these accounts before their accountants requesting their comments and questions. 

The facts are these

  • Turnover was £442m, down 28% from £610.5m


  • £8m loss due to cheese quality issues. This is huge, and unforgivable. But at least the new management team quickly accepted it, and have put in place strategies to improve.
  • Balance sheet reserves down from -£8m to -£45.1m. The numbers also confirm that FM held £50.9m of members’ capital retentions at 31st March 2015, with only £6m assets to set against this figure.There must surely be a case that the business should specify the capital repayment amount due from members who no longer supply them as a debt to the business. This should be separated from the capital held from members who still supply milk.  The way it is currently accounted for it is not transparent.
  • Capital repayments to leaving members delayed by one year to March 2016, following which they are to be spread out over 3 years.  This added £9.3m to the pot. 

The harsh reality, which most members already realise, is that the likelihood of members receiving any repayment of capital is slim. 

  • Member capital retentions were increased from 0.5 to 2ppl from December 2014 to August 2015.  This adds £15m to the financials if FM still handle 1 billion litres of members milk.  In addition, the member capital limit rose from 5ppl to 7ppl.
  • Barclays and Lloyds will provide a finance facility until 1st February 2016.  The facility is payable on demand so First Milk depend on the two banks’ continued support. The facility available at 31st March 2015 was £62.2m. The Directors/Board state the current facility may need to be supplemented with additional borrowing and funding during this year. The existing bank loans ideally need to be extended, renewed or replaced this year.  There is no time for Christmas to get in the way!. If they aren’t then the new year leading up until February will be a very tense and uncertain time.
  • Pre-tax loss of £24.9m compared to a loss of £4.3m, but excluding one off exceptional costs in the year it was a loss of £23.5m compared to a surplus of £3.5m the year before. During the year FM consistently paid one of the lowest farm gate milk prices to members, but it still paid more out than the business generated.  In other words, FM should have cut the price they paid for milk harder and sooner, to perhaps the tune of towards an extra 3ppl throughout the year.


  • Producers’ milk payments continue to be delayed by 2 weeks, which has given the business around a £5m cash flow benefit. These “delayed” payments continue to favour the bankers at the expense of the members.
  • A £600,000 write off for a loan with First Milk Energy Limited
  • Poor financial performance of the CNP business, acquired in 2012, resulting in a significant reduction in the businesses valuation and a £1.2m adjustment charge in the accounts. It’s a head scratcher to understand how come FM has ended up paying the farmer owners of the CNP business an extra £200,000 when the value of the business is impaired.  The CNP business has now cost FM £10.6m, and it recently lost its Team Sky contract (probably because it couldn’t afford to renew it). This purchase must rank as one of the worst acquisitions ever in the British dairy industry, even top trumping DFOB’s acquisition of the ACC business.
  • The Pensions Liability is a huge millstone around FM’s neck, and is something former CEO Kate Allum tried to reduce in negotiation with government in 2013/14.

Nett pension liability is up from £13.8m to £20.1m and growing at an alarming rate and needs to be funded. According to the accounts, FM are paying £2.3m a year but this simply has to increase or the deficit will continue to increase unless someone can wave a magic wand.

  • Kate Allum’s total pay in the year was £332,000 and Sir Jim Paice’s was £90,000. Nice work if you can get it!
  • Directors and former directors continue to resign to supply other processors.
  • FM own 59.3% of Westbury Dairies Limited with Arla owning the remaining shares. This now looks to be a liability as opposed to an asset to FM. However, the volume of milk travelling from Scotland to Westbury is a concern if FM were to exit Westbury.
  • Staff numbers down from 649 to 430

·         FM have spent £2.1m reviewing the financial position of the business along with its future prospects. That must be £2,000 plus per current supplying member or 0.2ppl plus.  Where was it spent and what real tangible value has it delivered?


In summary we refer to the auditors report on Page 14:  “The Group incurred a loss of £27.5 million during the year ended 31 March 2015 and continued to be loss making for the six month period to 30 September 2015. Additionally, the Group's and the Society's bank facilities are payable on demand and are available until 1 February 2016. As set out in the directors' report and Note 1 to the financial statements, the ability of the Group and the Society to realise their assets and discharge their liabilities in the normal course of business is dependent upon the adequacy of the bank facilities and the continued support of their lenders, achievement of forecast financial performance and securing financing for the period beyond the expiry of the current facility. These conditions, along with the other matters explained in Note 1 to the financial statements, indicate the existence of material uncertainties which may cast significant doubt upon the Group’s and the Society’s ability to continue as a going concern.” This requires no further commentary.

Both the auditors and the directors cast doubt over whether the business can continue as a going concern mainly due to the need to renew the banking facility and to meet its financial performance projections.

Note, Ian is NOT an accountant and no one should rely on this analysis as advice. It is Ian’s assessment based on recent FM publications. No representation or warranty is provided as to the accuracy of the information and it should not be used as a basis to make on farm decisions.  However, it could be used by members when questioning the board and management of FM, if they so wish.

Was First Milk’s claim - “Slightly better than break-even” the reality? (30th October 2015)

In its 3rd July members newsletter FM claimed the following:


April & May resulted in a slightly better than break-even position. June is expected to be similar.

P&L is being run at marginal break-even to ensure that milk price is max we can afford.

First quarter results is a critical milestone and demonstrate the impact of changes so far.


Was this the reality, though, and the truth? Or did it make a profit in April, May, and June only to lose more than it made in July, August and September? The report issued today clearly states that the business has continued to be loss making for the six-month period to 30th September 2015. In addition, at that time losses were stated to be around £22m but at the end of the day were 25% greater at £27.5m.


First Milk Board lambasted in Governance Report  (30th October 2015)


First Milk has also announced its action plan following its overdue independent review.  They key points are:

A 49 page independent review by Greenburn into the governance of First Milk has effectively lambasted its current board.  In short it is distressing reading, especially the time line on pages 12 to 15, for FM members but at least the grim facts are now out in the open.


The conclusion is unambiguous in that its Farmer Board is left wanting.  The report states “there have been severe short comings in governance both at Board and Senior Management level for a number of years. This includes failure to follow conventional business practice in a number of ways.”


It goes on to say:


“The Board of Directors lacked the collective knowledge and experience to successfully navigate the business forward …..” and it refers to a catalogue of inadequate accounting systems.


“The Board are ultimately responsible for ensuring the co-operative has a strong and sustainable business.”


The authors question whether the Board managed the CEO or was it the other way around?  They refer to “The perceived lack of competence at Board level, the Board’s inability to understand the financial information provided and the protracted decision making.”


The report refers to “a lack of leadership from the Board”


This report is set to go down in the UK dairy industry history books along the lines of the famous Myners Report for The Co-Operative.  It’s hard hitting and leaves nowhere for those involved to hide. Frankly few, if any, of the current farmers members of the First Milk Board should be up for re-election.


The key recommendations are:


·         The board will be reduced from 9 to 7 with an “independent commercial chairman”

·         Going forward an elected farmer council of 7 members will represent the farmer owners

·         Farmer board members will reduce from 5 to 2 with the aim of bringing in more commercial board members.  One of these farmers will be Vice Chairman.


·         Given the incompetence of the existing board few, if any, are likely to be required under the new structure as board members.


First Milk continues to fail despite the recommendations of the Governance Report  (30th October 2015)

The final insult for FM members is their continued failure to adopt good practices.

Members have been given less than a week to study the accounts and the report ahead of the AGM.  One Scottish member spoke to Ian today about this and he was extremely unhappy. Highlighted in the Governance Report it confirms that in May 2015 a review of FM’s financial governance stated that:

“The monthly reporting pack is often released for review too late in the month for there to be any effective analysis done prior to Board meetings.”  In some cases only 24 hours before a meeting.

To give farmer members less than a week must surely be inadequate given the state of the finances and the situation their co-op faces.

So where is the good news?  (30th October 2015)

The reality is that there is no good news in these reports, other than the fact that that the senior management have gone and a new team are in place. Have they got the skills to turn this business around? Have they got the time? We won’t know until January 2016 when we find out about the financing. There isn’t much time at all.

snaptag banner


Snap to it on Snaptags! (30th October 2015)

Ian Potter Associates has, for the last three years, been actively marketing the Snaptag brand of Cattle, Sheep & Pig ear tags. Repeat orders from every customer (OK, with the exception of one) speak for themselves in terms of their quality and durability. Basically they're the bull's / boars / rams nadgers when it comes to tags.


And this, of course, is the bull's nadgers when it comes to dairy bulletins, which we send to you FOC because we're nice people.


There is, though, no such things as getting summut for nowt, and we strive to sell something on the back of it - hence our plugs for these tags, Pinpointpal vehicle tracking devices, and the occasional request for information for our database cleansing so we know who's genuinely a dairy farmer and who's just pretendin'.


So if you've got livestock and are in the market for tags (and even if you aren't - we're not fussy!) then give us a call! Our general tags & sample tags (BVD) are extremely competitive so why not ask us to quote! Go on...you know you want to...


For more information please contact Lydia on 01335 320016 or email her on lydia@ipaquotas.co.uk.


Thank you, and we look forward to your custom and to continuing to be able to send this bulletin out FOC.


Arla to hold its milk price  (23rd October 2015)

Arla is to hold its member milk price for November and the price it pays it direct suppliers and organic suppliers for December.


The member standard litre price remains at 23.04ppl for Arla AMCO and Arla Milk Link members.  The Arla AMCO Tesco price is 23.74ppl.


In its communication to members Arla states “The outlook for the coming months is mainly stable”, which in itself is a small welcome glimmer of light from one of the European milk processing giants, especially when you consider that UK and European milk supplies continue to increase.


GDT shows 3.1% downward blip  (23rd October 2015)

The road to recovery was always going to be a rocky one as demonstrated by this week’s auction results in which the auction average dropped 3.1% on the back of 4 significant consecutive auction rises.  The quantity of product on offer was down 1531 tonnes (4.2%) to 34,519 tonnes.


Key results were:


Average price           US$ 2735/tonne (-3.1%)

Butter                     US$ 2850/tonne (-11.1%)

WMP                      US$ 2694/tonne (-4.6%)

SMP                       US$ 2178/tonne             (-4.5%)

Cheddar      US$ 3163/tonne (-2.2%)


All in the global dairy industry expect prices to continue to increase, however, further downward corrections this side of Christmas are equally anticipated.


Muller get green light on Dairy Crest acquisition but ….!  (23rd October 2015)

UK Competition & Markets Authority (CMA) have given the green light for Muller Wiseman to acquire Dairy Crest’s liquid business having accepted the undertaking that Medina Dairies will have the facility to toll processes up to 100 million litres of milk a year at Dairy Crest’s Severnside factory in Gloucestershire.  The deal will be completed on or before 26th December 2015. 


In a statement whilst the £80 million price paid was re-confirmed it was accompanied with a £15 million allowance, which was attributed and dumped on the CMA’s modified undertakings.


This is a staggering figure and in simple terms if Medina were to process the full 100 million litres a year for five years the £15 million deduction equates to 3ppl.


The more likely reason for a sizeable part of the deduction is that in addition to the modified undertakings with Medina, Dairy Crest’s liquid business profits and performance has deteriorated and part of this deduction is due to this hidden factor.  However, Dairy Crest will still be delighted at the nett £65 million and to be out of the liquid business by the year end allowing them and others to focus on their cheese business, which is sure to be open to offers in 2016 from European hunters.


Dairy Crest’s shares were under £4 a year ago and on the announcement jumped to £6.55 yesterday.


Medina what next?  (23rd October 2015)

Medina will have the facility to use the toll processing for up to 100 million litres of milk but this does not mean they will utilise the full facility during the 5 to 8 year period. However, Medina are ambitious and intend to continue to grow their existing business. 


Medina stated to Ian its strategy is find customers 1st, milk sourcing 2nd .  Ian believes this is very sound business policy and one some dairy farmers should take note of. 


DairyCo/AHDB Dairy yesterday suggested in their commentary that the Medina involvement means Medina “will likely need milk close to the factory to achieve it ….. Farmers should be ready to compare any offers ….”


Medina have confirmed to Ian that this is pure speculation.  First job is for Medina’s commercial team to secure new long term sustainable business.  They then have the option to process their existing farmers’ milk at Severnside or take milk from Muller Wiseman or a hybrid of the two.  Recruitment of new milk suppliers whilst possible is not on their radar so please don’t form an orderly queue because it’s likely to be a long wait.


B price milk watch  (23rd October 2015)

Let us have your milk buyers’ current B price on a strictly private and confidential basis.  Here are the ones we have been informed about:


Paynes Dairies                    11ppl and could alter but not upwards according to Charlie Payne

First Milk                 13ppl (+1.5ppl) and trending up

Grahams Dairies      10ppl (September)


First Milk lose Sky contract  (23rd October 2015)

CNP which is the sports nutrition company acquired by First Milk has lost its contract to supply product to the British cycling, Team Sky (source:  DIN).


New Non-Executive Director at First Milk  (23rd October 2015)

Until recently Carl Ravenhall was MD at Muller Wiseman and prior to that MD of Milk Link’s cheese business until the Arla takeover.


He has now been appointed to the First Milk board.


First Milk will be in the news next week in the run up to their AGM next Friday (30th) ahead of which their financial accounts for the year will have to be released as will details of when Chairman Jim Paice will stand down and who will take his place.  In addition, the independent review of the co-op’s governance announced on the 1st May is overdue (due summer) and members will expect it on or before next Friday’s meeting and must surely recommend a re-shaping of its board.


1.54ppl extra to First Milk’s Haverfordwest supplier/members   (19th October 2015)

First Milk will pay an additional 1.54ppl on supplies of members A litres milk to its Haverfordwest factory representing the Tesco winter cheese supplement paid by Tesco to Adams Foods.


0.365ppl milk price reduction for Dairy Crest formula contracts  (19th October 2015)

A premium of 4.9ppl now exists between the formula price and Dairy Crest’s non-aligned milk price.


This results in a liquid standard litre price for formula contracted suppliers of 26.9ppl (www.milkprices.com)


Morrisons Milk for Farmers is flying off the shelves  (19th October 2015)

Firstly Ian has to eat a large slice of Morrisons own brand humble pie and apologise for the fact he initially doubted the wisdom of the Morrisons Milk for Farmers brand, and indeed referred to it as a gimmick.


The new milk was on the Morrisons shelves on time and sales are flying, so much so that they caught processor Arla and Morrisons out, who both underestimated its likely popularity. The office has had several emails reporting of empty shelves with store managers receiving complaints from customers that the milk was unavailable.


Initial sales are accounting for close to 10% of all Morrisons liquid sales with the 10ppl premium/23ppl extra for a 4 pint carton going to farmer members of Arla only.


Ian has made enquiries and Morrisons have not taken any money out of the farmers’ pot to cover marketing or design and have stumped up the money from their own coffers.


In addition, if the situation should arise whereby close to sell by date “Milk for Farmers” has to be discounted this cost is shouldered by Morrisons and not the farmers, so the farmers still receive the extra 23ppl.


So the early indications are that consumers ARE willing to pay an extra 10ppl, and if all of this carries on for the long term it’s a win-win for the Arla boys.


Next on the supermarket shelves should be Morrisons own label cheddar, which will sell for a 34ppl per pack premium equivalent to 10ppl.  If and when you spot it, please send us the details.


Dirty tactics on Morrisons milk  (19th October 2015)

The success of the Morrisons Milk for Farmers appears to have aggrieved a few people and brought the industry’s dark side into play. 


Welcome to the bulletin for the first time Andrew Henderson from Crewe, Cheshire, MD of a small liquid milk business Nemi milk, dairy nutritionist and owner of a feed firm called Independent Feeds Limited. He’s well known to some farmers on twitter as @Nemi Milk, and for his love of Arla-baiting, having posted charming tweets comparing the Morrisons brand and Arla to FIFA, and even sending Liz Truss messages about “someone milking British public emotions and the UK dairy crisis”. The milk is “shameful”, the marketing “ill-informed” and Arla is “a co-op who deliberately misleads”. It is a “#scandal”.


If that isn’t enough he has picked a fight with David Handley and told him that he has requested Trading Standards investigate the Morrisons brand. The claims are the initiative and its delivery are illegal, and the move could single handed stop the initiative. There is a possibility it could be withdrawn from sale pending an investigation. If this happens it will enrage Arla’s dairy farmers on an unimaginable scale.



But Henderson isn’t alone in his endeavours to stir the pot. Hail, incredibly, Tesco supplier Roddy Catto, who is a founder member of the Muller Wiseman Milk Group and until very recently its former chairman. And yes, you read it right. He’s a Tesco supplier supplying no milk whatsover to Morrisons.


He went on local television wearing his Scottish NFU hat commenting on the Morrisons offer: In the interview Catto states the scheme “is a shambles” and “How would I be able to calculate how much extra money I’m going to get from Morrisons?”  That is an easy calculation. It’s zero. Consequently he should not have been commenting on a Morrisons initiative.


For the full interview click on:            http://news.stv.tv/north/1330565-morrisons-more-expensive-milk-for-farmers-range-a-shambles/


Next, and not to be left out of the murk comes dairy farmer Stuart Heath from Staffordshire, who is one of Muller Wiseman’s farmers who sits on the Tesco Sustainable Dairy Group Committee and, again supplies Tesco, not Morrisons. He also was on national TV commenting on the Morrisons initiative and was also less than complimentary about it. For the full interview click on:      https://www.youtube.com/watch?v=W5sCEybRrqc&feature=youtu.be&a


Questions are flying around as to why, only a day or two before the CMA announce their decision on the takeover of Dairy Crest’s liquid business by Muller, that two high ranking Tesco-Muller Wiseman farmers end up on TV commenting in a hugely negative way on the Morrisons initiative. Quite what Tesco say about the ethics of two of their farmers commenting so publically and critically on a rival is one that Ian intends to find out.


In addition, since the announcement on the 6th November 2014 that Muller Wiseman intended to buy Dairy Crest’s liquid business (which has been ratified by the CMA today – google “CMA accepts remedy in dairy merger”) the deal has had a clean run. Journalists, media, industry organisations and competitor processors have been careful not to jump in with their size nine’s. And yet within hours of the deadline for the announcement by the CMA we have these antics. One of the videos could be put down to naivety; two of them are definitely questionable; two plus the Trading Standards referral certainly don’t look as if they are accidental.


It’s murky stuff, not befitting The White Stuff.


AHDB Dairy/DairyCo come under fire again from industry leaders


Shot No. 1 – AHDB Dairy is particularly impotent  (19th October 2015)

The Tenant Farmers’ Association (TFA) have issued a press release headed “Dairy Sector needs much improved levy board”, which challenges the performance of AHDB Dairy and how it delivers value for money with the £7 million it spends of farmers’ money each year.


The release follows a recent meeting in which the TFA commented “if this was a school inspection our findings would be that AHDB Dairy required improvement and in areas was inadequate.  We need to see a much improved board as soon as possible.”  The full press release makes for interesting ready, click on



Shot No. 2 – Farmers For Action news page slams AHDB Dairy Chairman  (19th October 2015)

FFA leader David Handley questions AHDB’s recent recruitments and suggest that as part of its consultation document farmers are given the choice to vote to opt in or out of paying the £7 million levy.


The full details can be found when you click on http://www.farmersforaction.org/news.php and scroll down to the paragraph, which starts with the words “South West Dairy Event”


First Milk executive has an eye-watering remit   (19th October 2015)

Brian Mackie has been appointed as First Milk’s Chief Operating Offices following the surprise departure of Gerry Sweeney, who was First Milk’s Finance Director.


Mackie has a very wide ranging and potentially eye-watering remit to cover, including leading First Milk’s finance, legal, HR and to drive its corporate development agenda.  It’s a big job and a significant commitment compared to his initial appointment as non-executive director in June 2015.  We wish him luck and the ability to create an 8-day working week.


Dairy Brand launch for Scotland   (19th October 2015)

A Scottish Dairy Brand/Marque was launched at last week’s German Anuga Food Fair in a bid to promote the quality and provenance of Scottish dairy products as well as a good place for processors to invest in processing and marketing.


15 November Calvers for Sale     (19th October 2015)

Pedigree cows (Holstein Friesian x British Friesian) from 8,000 litre herd.  Due around November 15th to beef bulls (mostly Belgian Blues) - £1000 ono – Location:  Newark

For further details call 07980 732330


Correction     (19th October 2015)

Our report on the prices achieved at the last GDT auction incorrectly stated that prices have risen by 100%.  The correct number was 10%.  Apologies.


Next auction is tomorrow, 20th October.  Results will be posted on our website late tomorrow or early Wednesday morning.


4th consecutive auction rise as average prices jump another 10%    (7th October 2015)

Yesterday’s Global Dairy Trade auction results continued to head north at speed.


The average price was up 9.9% to average $2834 tonne.


Notable movers were:


SMP up 13.4% to average $2267

WMP up 12.9% to average $2824


This is the fourth consecutive increase since the all time low result recorded in August.


1.469ppl milk price reduction for Dairy Crest M&S suppliers – from 1st November (PRODUCER NOTIFIED)   (7th October 2015)

This take producers standard litre price to 31.33ppl (www.milkprices.com)


0.31ppl milk price reduction for Muller Wiseman CDG suppliers – from 1st November  (PRODUCER NOTIFIED)    (7th October 2015)

This takes the standard litre price for those contracted to the co-operative dairy group to 28.01ppl (www.milkprices.com)


Tesco’s supplementary cheese payment is confirmed by SCC   (7th October 2015)

South Caernarfon Creameries will pay an additional 2.5ppl to all its co-op members for the three month period September, October & November.  This will be shown separately on milk payments and represents Tesco’s commitment to pay 29.93ppl on milk supplied into its own label British cheddar.


The three month commitment is due to the fact SCC’s three year contract to supply British cheese to Tesco via Adams Foods (Leek) ends in December.


1ppl milk price drop from SCC – from 1st November (PRODUCER NOTIFIED)   (7th October 2015)

So it’s plus 2.5ppl (see Tesco supplementary payment above) less 1ppl below.  The result is that after this 1ppl drop and excluding the Tesco additional payment the 1st November standard litre price is 21.89ppl and on the more appropriate manufacturing standard litre the price it is only 20.03ppl (www.milkprices.com)


Signs of international price improvements   (7th October 2015)

There are now signs of upward price movements some of which are already filtering down to farm level.


For example, Friesland Campina +0.5 Euro Cents for October (approximately 0.35ppl).


In addition, futures trading are trending upwards as are international and EU commodity prices.  Fingers crossed the trend continues.


Sainsburys agree a supplementary payment to Barbers cheese producers   (7th October 2015)

Sainsburys are understood to have agreed to pay an additional 2.5ppl on the milk equivalent, which goes into Sainsburys own label cheddar cheese supplied by Barbers.


Arla launches its own farm assurance scheme in the UK   (7th October 2015)

Arla’s own farm assurance scheme called Arlagarden has been launched in the UK.  The assurance scheme and mark already operates in Sweden, Denmark, Germany, Luxembourg and Belgium.


The assurance scheme focuses on animal welfare, milk quality and food safety.  Put another way care in every step from cow to consumer. The standards apply to both Arla co-operative members and direct suppliers.


Morrisons Milk For Farmers has been spotted   (7th October 2015)

In both Morrisons, Melton Mowbray and Corby at £1.12 for 4 pints.  Unfortunately, the price comparison stated that this equated to £493.40 a litre, which is sure to soon by amended to 49.34ppl.




https://pbs.twimg.com/profile_images/532216707121553409/-JWWcfw-_400x400.jpegUrgent England V Uruguay tickets    (7th October 2015)

Two tickets for the match this Saturday 10th October.

Category A tickets in Block 222.

Kick off 8 o’clock at Manchester City Stadium.

These will be sold at cost or to the highest offer received by email by 3pm tomorrow Thursday 8th. The IPMS office will send them to the highest bidder by guaranteed next day delivery which will be included in the ticket price.


Enquiries email lydia@ipaquotas.co.uk

or call 01335 324594









1.5ppl milk price reduction for Dairy Crest Davidstow producers – from 1st November   (2nd October 2015)

This takes producers (www.milkprices.com) standard litre price to 23.84ppl.


Whilst the reduction is unwelcome and unpopular the 2015 history of the Davidstow’s ex-farm gate milk price is, under the current market conditions, impressive.


It is only the second reduction in 2015 and there was even a small 0.25ppl August milk price increase.  In addition, the new price still (we believe) leaves Davidstow at the top of the milk for cheese league table.


1.2ppl milk price reduction for The Fresh Milk Company (AKA Lactalis) producers – from 1st November (PRODUCER NOTIFIED)   (2nd October 2015)

The standard litre price is still to be confirmed but expected to be 21.01ppl.


0.35ppl milk price reduction for Tesco (TSDG) suppliers – from 1st November  (2nd October 2015)

This takes producers (www.milkprices.com) standard litre price to 30.58ppl, including the 0.5ppl Promar costing premium, or 30.08ppl, excluding this payment.  The price is fixed for the six month period 1st November to 30th April 2016 for the 600 or so producers involved.


Tesco producers should be pleased with this announcement confirming Tesco have maintained their promise to pay the cost of production (now 30.08p), however, the outcome of the ongoing review is still to be announced and implemented.  The announcement is expected next month.


Stand on for Dairy Crest liquid contracted producers plus estimated supplementary payments of 0.39ppl & 0.65ppl   (2nd October 2015)

This means producer’s standard litre price for November will be 21.69 (www.milkprices.com), excluding the additional payments.(see below)


The additional financial support payments from both Morrisons and Lidl will be shown separate on producers’ milk cheque payments starting in October.


The October supplementary payment is expected to be 0.39ppl and will be paid on November 15th. The first full month will be 0.65pp based on September milk sales and paid on 15th December.  The reason for the delay in DC paying out the first support payment is cash flow based and revolves around the payment terms Lidl and Morrisons work to.  In a nutshell DC have no reason to bank roll or bridge the gap.  The flip side is that the payments to producers will continue around two months after the deadline date.


Clearly once the sale of Dairy Crest’s liquid division is approved different arrangements concerning these payments by Muller may be adopted however they are sure to be honoured.


£15.5million of English aid to be distributed to all     (2nd October 2015)

DEFRA has decided to distribute the English share of the EU support package amounting to £15.5million based on deliveries in 2014/2015 year.  The same decision has been made in Wales where £3.2million is to be distributed.


Note, the payments are not connected to quota held at 31st March 2015.


The expected payment will be around £1700 to £1800 per 1 million litres of production and will be paid in December by the RPA.


Scotland (£2.3million) has yet to declare how they intend to distribute the pot.


Sharing it evenly is perhaps understandable, however, for those on premium contracts, for example the retailer aligned and organic, it’s a surprise unexpected windfall as opposed to those who are currently receiving under 18ppl where it could be a necessity and almost a lifeline.


Would be Tesco producers – form an orderly queue    (2nd October 2015)

Tesco have announced their intention to add a further 150 or so producers to its core pool during the first quarter of 2016.  Those interested should form an orderly queue whilst Arla and Muller decide who the chosen few will be and what each processors respective share is.


Competition Markets Authority announcement on Dairy Crest’s liquid sale is imminent  (2nd October 2015)

Whilst a decision from the CMA on the Muller Wiseman acquisition of Dairy Crest’s liquid business could come earlier than the 19th October 2015 it is expected that the announcement will not be publicised until the deadline date of the 19th.


The clear expectation on all sides is that the sale will be completed by the 31st December 2015.



If anyone spots the new Morrisons Milk for Farmers on the shelves, please can you take a photograph and email details to me with the location & price.


15 November Calvers For Sale    (2nd October 2015)

Pedigree cows (Holstein Fresian x British Friesian) from 8,000 litre herd.

Due around November 15th to beef bulls (mostly Belgian Blues)

£1000 ono

Location - Newark

For further details call 07980 732330


MP gets to grips with the dairy crisis    (2nd October 2015)

Rishi Sunak, the new MP for William Hague’s old seat in Yorkshire sits on the DEFRA select committee has been doing a lot of work on the milk price crisis, both in the select committee context but also doing his own research


He has come up with a ten-point plan for the industry – a series of practical proposals, some short term some mid- to long-term.


We thought his plan worthy of circulation: email any comments to malcolm@rishisunak.com


Ten steps to help save British dairying


LAST week I spoke to an 80-year-old farmer in my constituency who told me that in a lifetime of dairy farming he had never seen times as so bad. With farm gate milk prices falling 30 per cent in a year – in many cases below the cost of production - it’s far from an exaggeration.


I have spent the last few weeks speaking to dairy farmers, industry experts and government ministers about the terrible difficulties the industry is facing. It’s clear nobody can wave a magic wand and resolve a situation ultimately caused by a global glut of milk, but I believe there are ten key steps that can, and must, be taken if we are to protect this most valuable element of our rural community:


1. More retailers giving farmers a fair deal

Many supermarkets have worked hard through a time of rock-bottom global milk prices to ensure that British farmers receive a sustainable price. That said, more can be done and it is absolutely vital every major retailer pays a fair price for British dairy produce. You can see how your supermarket treats its famers by checking the National Farmers Union website – if you’re not happy, vote with your wallet.


2. An end to milk being used a permanent ‘loss leader’

All of us have seen the price of milk plummet in recent years, with many supermarkets now charging only £1 for four pints. This kind of pricing can have widely detrimental effects. That’s because low prices in supermarkets force down prices all across the market, forcing your corner shop to cut its milk price in order to compete, in turn putting pressure on milk producers. Milk is a quality product, and pricing should reflect that.


3. Better labelling of British produce

It might seem like there is little that could be more English than a slice of Cheddar, but what many consumers don’t know is that many of the major cheddar brands on the shelves are produced in Europe. We need to have clearer packaging that empowers consumers to buy British.


4.  More domestic production of dairy products

It’s a scandal that two thirds of our cheese and 30 per cent of our butter is imported from overseas. We need to invest more in processing technology to make sure we are adding value to British milk by turning more of it into British butter, yogurt and cheese rather than importing so much.


5. More supply chain transparency and enforcement

We know how much a farmer gets paid for a pint of milk, and we know how much we pay for it in the shops. What we don’t know is how big the margins are in-between. We need to work towards the kind of transparency that allows us to follow milk from farmer to shelf in order to ensure a fair price is being paid at every stage. Good supply chain practices then need to be enforced by a tough Grocery Code Adjudicator and strong code of practice.


6. More dairy Producer Organisations

Groups of farmers banding together to negotiate a better sale price for milk and a lower purchase price for feed and machinery are commonplace across Europe, particularly in the successful German market. In the UK we currently have only one such producer organisation. If farmers are going to balance out the power of big processors and retailers that needs to change.


7. Government must buy British

National government is working hard to purchase British dairy products, but more can be done at a regional level. We must push local government, hospitals, schools, and military establishments to do more. 


8. A working dairy futures market

Futures are a way for farmers to agree a pre-arranged price for milk they will produce in the future. The price stability this can give has the potential to be invaluable to the volatile dairy industry. We need the UK to follow in the footsteps of the USA and New Zealand in making a working dairy futures market available.


9. Review of levy board spending

Every dairy farmer in the UK currently pays a percentage of their income to a government- run levy board. Many farmers feel that more of that money needs to be spent promoting the benefits of milk and encouraging consumers to choose British. It is vital that farmers feel like their levy money is being spent in a way that actually helps them.


10. Immediate financial assistance

The EU has announced a €500m crisis fund to support vulnerable dairy farmers and we must get our fair share. Also, it is important that regular CAP payments to farmers should be made as quickly as possible to ease cash flow problems. Lastly, HMRC and banks must understand the inherent volatility in farming incomes and be flexible in how they treat farmers. 


COMMENT FROM RISHI    (2nd October 2015)

Without its dairy farmers, Yorkshire’s magical landscape would soon see its lush fields turn to scrub and its dry-stone-walls go unrepaired. Meanwhile, with Britain already only 60 per cent self-sufficient in food, our country’s ability to feed itself in a time of crisis would be diminished. Only by working together can we preserve our dairy industry, and with it our beautiful countryside, for generations to come.


Spotted on a London Underground Billboard   (2nd October 2015)



IMG-20150922-00018 (2)


As was stated by the eagle-eyed reader it’s not exactly a positive image of our industry.


0.38ppl Arla Amba milk price increase netts down to 0.03ppl   (25th September 2015)

From 28th September the Arla Amba member milk price will increase by 0.38ppl (0.5 Euro Cents/litre), however, the strength of sterling means the currency smoothing mechanism eliminates 0.35ppl resulting in a nett 0.03ppl gain.


This results in the following www.milkprices.com standard litre prices:


Arla Amco members                        23.04ppl

Arla Amco Tesco suppliers   23.74ppl


First Milk Haverfordwest producers to receive an extra 1.5 to 2ppl courtesy of Tesco   (25th September 2015)

The 240 or so First Milk members who supply the co-ops Haverfordwest Creamery have been informed that the Tesco initiative on cheese, agreed earlier this month, will result in a price increase of between 1.5 to 2ppl.


The extra money will be paid by Tesco on all milk supplied for its own label British cheese (via Adams Foods).


The payment will be shown separately on each farmer’s milk statement with the first payment for September deliveries showing on producers’ October milk statement.


Some non-Haverfordwest First Milk suppliers are unhappy with the ring fencing of the money; however, it is consistent with the pricing model, which CEO Mike Gallacher introduced on his appointment in a bid to ensure they no longer paid out more money than they received as happened in 2014/15.


Russian EU dairy import ban could easily be permanent   (25th September 2015)

According to a report from this week’s IDF Conference in Lithuania, a speaker from the Russian dairy publication has stated that the ban on the importation of European dairy products will last until at least 2018.


Realistically the likelihood is that the ban will be permanent given Russia’s plans to expand domestic milk production on an industrial scale e.g.  The 100,000 cow unit (Source:  DIN)


European milk production up 3.4% comparing July 14 v July 15  (25th September 2015)


New chairman at Dairy UK   (25th September 2015)

David Dobbin CEO of the co-operative United Dairy Farmers has been appointed chairman of Dairy UK.


Dobbin is very popular and well respected in both the European and global dairy industry and will want to make his mark in his new role.


CLA Game Fair is in limbo   (25th September 2015)

The CLA has announced that it will not be running future game fairs including the 2016 event scheduled for Ragley Hall.


The surprise announcement has come on the back of three consecutive loss making years.


Whether another operation/organisation will step forward to run a replacement event remains to be seen.  The first CLA game fair was held in 1958 in Ellesmere and Ian’s first, in shorts, was in 1972 at Raby Castle he has attended most years since 1972.


Date:  Thursday 1st October 2015   (25th September 2015)

Time: 1000 - 1530

Venue: National Motorcycle Museum, Birmingham

Conference title: Positive Dairying: Winning in the global market place      





Nicolas Saphir, Executive Chairman,

Heather Wheeler, MP, chair All Party Parliamentary Group - Dairy


Global dairy trends – where is the world market taking us and where will that leave British dairy farmers?


CHAIR: Nicholas Saphir


Sean Rickard, independent economist


In or out of Europe – which will be the best option for dairy farmers?


CHAIR: Heather Wheeler, All Party Parliamentary Group - Dairy

To stay in Europe:  Neil Parish

To go out of Europe:  Dr Richard North




Vote to be taken with the audience



Tea/Coffee break



Adding global value to a commodity product


Chair: Amanda Ball, AHDB Dairy


Richard Hampton, Managing Director, OMSCo


John Giles, Agri-Food director, Promar International


AN Other



Any Questions panel – from texts and tweets (**) and questions from the floor

Chair: Ian Potter, Ian Potter Associates


Rob Harrison, NFU Dairy Board, Ewan McCombe, Kite Consulting, John Giles, Promar International, Dr Richard North






Announce and introduce the OMSCo Farmer of the Year – Nicholas Saphir, Chairman, OMSCo and  Jamie Day, editor, Dairy Update, Farm Business


Positioning to win: How farmers can take advantage of new market opportunities


Chair:  Tim Brigstocke 


Lyndon Edwards, OMSCo



Profitable and sustainable dairy farming: How to manage the dairy cow of the future – from the soil upwards

Chair:  Tim Brigstocke


Jo Scammel, Ground Level Nutrition

Wil Armitage, organic dairy farmer, Leicestershire

Dr Roger Blowey, veterinary surgeon


Conference summary

Nicholas Saphir  




Dairy Crest to stand on with prices for October   (16th September 2015)

The move means the non aligned liquid suppliers standard litre price holds at 21.69ppl and the Davidstow price holds at 25.34ppl (www.milkprices.com).


0.36ppl milk price reduction for Dairy Crest/DCD Formula contracted producers – from October 1st   (16th September 2015)

This results in a new standard litre price of 27.08ppl (www.milkprices.com)


Another massive jump in GDT auction prices at + 16.5%  (16th September 2015)

This is certainly a roller coaster ride for GDT auction prices as this week’s prices saw the third consecutive double digit increase.


The average was up 16.5% to $2568 (US)


Key movers were:


WMP          +          20.6%   to average $2495

SMP           +          17%      to average $1992

Butter         +          13.3%   to average $3108

Cheese       +          10.7%   to average $3206


The lift comes on the back of 14.8% and 10.9% increases and is partly due to a further 15,200 tonnes cut in the volume Fonterra will offer for sale in the next three months and a total 12 month volume cut amounting to 78,000 tonnes. At this week’s auction the amount of WMP on offer was 5% less than two weeks ago and 43% less than the corresponding auction a year ago.


During the last three auctions the average all products sold price is up 42% with WMP up a staggering 57% and SMP up 42%. Farmers will no doubt be cautiously optimistic that prices have bottomed out but note these headline increases come from record low averages are we not out of the wood yet but analysts are now claiming we are past the bottom.


From the New Zealand farmers point the fact WMP prices have passed the $2,200 tonne mark is significant because this is the level required to maintain the current seasons farm gate milk price forecast.


AMPE hits its lowest point to date    (16th September 2015)

August AMPE has dropped to only 15.5p, which represents a 15 year low since it was invented by Barry Wilson/DIN. AMPE now weighs in at 1.3p above IMPE (14.2ppl). Note, the European Commission last week declined to raise the intervention price of SMP, which was viewed as a way The Commission could have helped stabilise the market. (Source DIN)


Intervention SMP continues to increase      (16th September 2015)

Close to 15,000 tonnes of SMP are now in intervention including 1048 tonnes from the UK and 261 tonnes from Southern Ireland.


Irish Cheese Advert says up yours to clear labelling      (16th September 2015)

Everyone in the UK dairy industry is aware that tensions are mounting over country of origin labelling on cheese with retailers displaying multi origin milk. 


The Irish Dairy Board appear to be waving two fingers to all involved having launched an advert with a Pilgrims Choice label stating ‘Improve the sales of your cheddar category in two easy steps’:


1.     Take the Pilgrims Choice label

2.     Stick it onto any other cheddar pack


This sort of promotion, seen in The Grocer, has to be challenged and remember the annual milk equivalent we import from Southern Ireland in cheese is a staggering 1 billion litres. Displace this and you make significant headway with the present demand problem. We must push for clean origin of milk labelling on cheese and back our own Red Tractor.


Commissions Dairy Support Package comes under attack and could involve milk quota  (16th September 2015)

Last week’s news that EU dairy farmers are to receive the most significant chunk of a €500 million support package was lambasted by the European Milk Board who are demanding politicians intervene to reduce the production of milk in the EU and described the package as “very disappointing”.  Stating that 5,000 dairy farmers did not take to the streets for this.


The fact is little of this money will filter down to UK farmers. In addition it’s yet to be decided how to distribute the money with milk quota held at 31st March 2015 an option under consideration because it would be simple to administrate.


So far as the UK is concerned the figure of £26.5 million is equivalent to 0.173ppl on all our production. So for a 1 million litre producer it will be worth £1,733. It’s not a lot but better than nothing.


Fonterra farmers rush for interest free support loans    (16th September 2015)

Over 1300 New Zealand dairy farmers signed up to Fonterra’s offer of interest free loans to help them through these difficult times in the first four days. The loans are interest free until at least 31st May 2017 after which Fonterra has the option to change interest.


No security is required over shares or other assets. Oh to be part of a co-operative who can make such an offer.


Muller is the official 2016 GB Olympic Partner    (16th September 2015)

The announcement was made by Lord Coe and gives Muller Wiseman fantastic marketing rights across all the Muller brands of yoghurts etc. and it is hoped that retailers will pay their part in the deal.


Conference Thursday 1st October – National Motorcycle Museum Birmingham Positive Dairying - Winning in the Global Market Place   (16th September 2015)

Starts         10:00 hours

Closes 15:30 hours


The conference is organised by OMSCO however it is not targeted at Organics.


It’s FREE to attend & comes with a free lunch, however, note places are limited.


For more information log onto www.omsco.co.uk


Yours truly will be making a guest appearance and chairing what promises to be a lively Q and A session!


1ppl milk price reduction for suppliers to Fresh Milk Company (AKA Lactalis) – from 1st October (PRODUCER NOTIFIED)   (7th September 2015)

This takes www.milkprices.com standard litre price down to 21.01ppl (liquid) and 21.74ppl (manufacturing)


0.5ppl milk price reduction for South Caernarfon Creameries suppliers – from 1st October (7th September 2015)

This takes producers standard litre price down to 20.35 (liquid) and 21.03ppl (manufacturing) www.milkprices.com


However, it is anticipated that following last week’s Tesco cheese milk price pledge that this decrease will be rescinded and replaced with a 1st September producer price increase. See story below.


0.5ppl milk price reduction for suppliers to Barbours Farmhouse Cheese- from 1st October (7th September 2015)

This takes producers standard litre price down to 23.3ppl


0.348ppl milk price reduction for Dairy Crest liquid formula contracted producers – from 1st September (7th September 2015)

This takes the www.milkprices.com standard litre price down to 27.63ppl.


0.2ppl milk price reduction for First Milk balancing pool – from 1st September (7th September 2015)


Plus 0.3ppl milk price reduction for First Milk balancing cheese pool members – from 1st September   (7th September 2015)


This takes producers www.milkprices.com standard litre price down to:


18.6ppl for Scotland

18.9ppl for North of England

17.9ppl for Midlands & East Wales

19.89ppl for Haverfordwest


2nd consecutive double digit bounce in GDT results    (7th September 2015)

GDT prices rose another 10.9% at last week’s auction to average $2226/tonne (US)


This follows hot on the heels of the 14.8% rise only two weeks earlier.


A contributory factor is the fact Fonterra have seriously reduced the volume of product on offer down 50% compared to that offered at the same auction a year ago. 

Milk production world wide is still ahead of demand and in New Zealand production is still rising due to the fact farmers are ramping up production in an attempt to receive the same value into their banks each month. Irish Milk production is still rocketing up with July output up 12.2% year on year. Until global milk production falls a full recovery seems impossible.


However, the latest auction results were as anticipated by a number of leading analysts following positive uplift signals in both futures and EU trading prices.  Dairy futures prices across the globe appear to be heading north e.g. $2000 (US) today/tonne with 2016 @ $2600 (US)


Key movers were:


Butter Milk Powder               +30%    to average         $1829

WMP                                              +12.1% to average         $2078

SMP                                               +11.7% to average         $1698

Butter                                             +8.1%   to average         $2746

Cheddar                              +4.7%   to average         $2913


Whilst this second consecutive bounce in prices is encouraging the fact is two swallows still don’t make a summer and the road to recovery is set to be a long haul with plenty of in store product still to be cleared.


FFA & NFU partnership works with Tesco    (7th September 2015)

David Handley & Michael Oakes are to be congratulated for their joint achievements in negotiations with Tesco in connection with Tesco’s latest cheese announcement.


Tesco have agreed to extend its pricing model to include milk, which goes into Tesco own label cheese sourced from both First Milk and South Caernarfon Creameries by paying 29.93ppl for the milk on the basis the additional money feeds back to the farmers.  This will run from 31st August 2015 to 28th February 2016. The money will be paid by Tesco to Adams Foods who will pay the respective Co-ops. Its still unclear whether all Co-op members will enjoy the benefit of the extra money or whether it will be divided up amongst a select group.


The move compliments the existing TSDG cheese model set up two years ago between Tesco and Parkham Farms.


So far as Tesco is concerned the next issue to tackle is multi-country of origin milk labelling in own brand cheese.


The promise from Tesco is to be more transparent from January 2016 with its cheese labelling. However this correction is required now and not only from Tesco.

By default this latest move points to the near certainty the TSDG liquid COP milk price will be at a similar level of 29.93ppl for next winter which will be a relief to some.


Muller Wiseman (MW) declare transparency in paying the extra money  (7th September 2015)

Muller Wiseman are separately identifying the additional money pledged and paid by retail customers following recent protests and negotiations.


The extra money will be ring fenced and shown as a supplementary payment and will be paid monthly based on actual sales commencing week 17th August 2015 when a string of deals and pledges were announced.


For August the supplementary payment will amount to 0.595ppl and had it been paid for the whole month with similar levels of sales the equivalent supplementary payment would have been circa 1.2ppl.


The money will be paid to Muller Wiseman 430 non-aligned who on average will produce around 1.4 to 1.5 million litres annually.


What does this mean for the piggy back milk purchasers?   (7th September 2015)

A number of milk purchasers and formulas utilise the Muller Wiseman non-aligned price in their basket of prices.  There will certainly be some moaning and wriggling from both processors and their producer representatives when they realise the extra money from retailers will not be added to the Muller Wiseman standard litre price.


Will some of their so-called representative negotiators seek to change the basket and/or the formulas?


That’s for them to sort out but for sure it will mean that for 430 or so Muller Wiseman non-aligned producers they have transparency.  In addition it will greatly assist Muller Wiseman in demonstrating an audit trial to confirm farmers have received ALL of the extra money paid by its retail customers.


Cheap Milk   (7th September 2015)

Co-op Chester 8 pints for £2!


Cheap Cheese   (7th September 2015)

The Co-op continued to promote Irish Cheese with Pilgrims choice Extra Mature Cheddar at half price selling for £2.25 for 350 grams or £6.43 per kg.


1ppl milk price reduction for suppliers to Fayrefield liquids – from 1st September   (21st August 2015)

This takes producers standard litre price to 18.5ppl (www.milkprices.com)


Arla to stand on with its September farmgate milk price   (21st August 2015)

Arla members milk price for September will be a stand on at 23.01ppl standard litre (www.milkprices.com) for its 13,500 member owners. This could be considered a positive result even if the resulting price is not one to sound the trumpets on.


3ppl Organic milk price increase to Arla Organic suppliers – from 31st August  (21st August 2015)

This is on the back of the continual strengthening for organic dairy products.


Aldi to pay at least 28ppl – from 17th August  (21st August 2015)


Lidl to pay at least 28ppl – from 17th August  (21st August 2015)


Morrisons to pay 26ppl minimum for all its liquid milk – from the end of August  (21st August 2015)

This is 2ppl less than Asda, Aldi & Lidl have agreed to pay.

Now we are starting to understand why several have commented that Morrisions are extremely difficult to deal with as customers or words to that effect. Their smart and skin flint moves are sure to put them back on FFA’s radar if indeed they were ever off it.

Note according to The Grocer the steepest retailer liquid milk price reductions have come from Morrisons who have wiped 36.5% off their retail price of milk in the past five years (source Kantar World Panel). In addition The Grocer reports that Tesco hold the record for the steepest price reduction in butter at 35.3%.


Morrisons Farmers Brand now extended to cheddar    (21st August 2015)

The Morrisons Milk for farmers brand will be extended to its own label cheddar with a 34p per pack premium equivalent to an extra 10ppl going to farmers. It might be what some of our organisations wanted but it’s a gimmick.


GDT Auction price + 15%   (21st August 2015)

This weeks average auction index price rise of almost 15% (+14.8%) was a shock and even more surprising was the 19% rise in the WMP average.


Prior to this weeks GDT result there were clear signs that prices had lifted with futures contract prices for September WMP lifting from US $1550 to US $1700 tonne with plenty of trading and market activity.


The auction results were helped by the fact Fonterra cut the amount on offer to only 18,000 tonnes of WMP at this weeks auction a 35% reduction on the scheduled 27,500 tonnes. In addition from September until the end of January the volume of WMP to be offered in the auction has been reduced by 15%.


Key prices were

WMP up 19.1% to average US $1856 tonne

Butter up 10.8% to average US $2541 tonne

SMP up 8.5% to average US $1521 tonne

Cheddar up 4.4% to average US £$2778 tonne


Next GDT auction will be September 1st


The fundamentals remain the same and it will take time before anyone starts to talk about a wholesale recovery. At best you can be cautiously optimistic but we certainly aren’t out of the wood yet but these results are a welcome sign for prices to perhaps hold for a while.


Asda is the first retailer to be authorised to use the Arla marque    (21st August 2015)

Asda has ticked all the boxes to enable the retail giant to use the new Arla marque on its own label milk together with its own label British Cheddar which uses 100% British Arla milk. The spotlight should now turn to others who are less British especially in their cheese sourcing. (See below)


Iceland are back on the radar  Part 1  (21st August 2015)

Icelands Farm Vale mild white cheddar states on the packet that’s its produced from milk originated from the UK & Ireland. Another pack of cheese with multi origin milk to confuse consumers!


Iceland Part 2     (21st August 2015)

The one retailer which has managed to keep off the radar during recent protests and activities is Iceland.

Back in late 2014 FFA were heavily involved in negotiations with Iceland and at the time a spokesman stated that with regards to FFA it would be happy “to open our books to any independent adjudicator that may be appointed by the government in the future.”

Iceland declared that the price it pays for milk would be “directly linked to the farmgate price received by dairy farmers in future.” Perhaps its time FFA and others revisited this declaration to see where Iceland currently sit which is hopefully somewhere between the 26ppl pledge of Morrisons and 32ppl paid by M & S and Waitrose.


UK SMP goes into Intervention   (21st August 2015)

A UK processor (rumoured to be Town of Monaghan from their leckpatrick plant in Northern Ireland) has placed 432 tonnes of SMP Intervention which represents 10% of the total intervention stocks of 4,246 tonnes. The milk price equivalent of this is around 16ppl.


Danish discount retailer REMA 100 increases the price it pays Arla for milk   (21st August 2015)

In a move which mirrors those made last week by retailers operating in the UK REMA has increased the price it pays Arla for its liquid milk by 50 Danish ore (approximately 5.3ppl) with a view to the additional money supporting circa 13,000 Arla members.


"It must be seen as a long-term initiative. I am well aware that price increases are not in the curriculum of the grocery book for discount chains, but Danish agriculture has been put under financial pressure from the declining prices. If we do not take this seriously, we risk squeezing dairy farmers out of business. If that happens, consumers will run the risk of not being able to buy Danish milk in the future. And we don't want that to happen. In REMA 1000 we have always only had Danish milk on the shelves, and we would like to continue having that, "says Anders Jensen, Purchasing Director of REMA 1000.


Surely its time for a Back British Dairy Products campaign   (21st August 2015)

From the very recent research we have done its clear there is groundswell support for a Back British Campaign particularly on cheese.

Current own label retailer cheese labelling is a disgrace and what’s needed is to highlight how several retailers are mixing Irish, New Zealand and UK milk to confuse consumers with multi origin cheese. 

The only way to persuade these retailers to source 100% British cheese using British milk is if consumers vote with their feet.

The opportunity is here today and what’s needed is transparent honest labelling in an attempt to displace more than 1 billion litres milk equivalent of Irish cheese we currently import. Oh and whilst we are having a Campaign lets get the government and food service to back British cheese. They are both huge users of cheese and both use Irish and/or multi origin cheese.


We don’t need the Clap Trap excuses as to why we cant address our own market failure as have recently been aired. We need people with a can do mentality because this momentum is gathering pace and its going to be a slow road to recovery and this must surely by self help.

There is still some work to do on liquid but the elephant in the room is now cheese and we need to look at a professional marketing Agency run Campaign funded by either the existing milk levy or new sources.


Snaptag   (21st August 2015)

Please contact Lydia on 01335 320016 or email her on lydia@ipaquotas.co.uk for more information on the Snaptag Cattle and Sheep ear tags, they have proven to be a fantastic tag, quick efficient printing at extremely competitive prices.

This bulletin is currently provided FOC and your support for our tag sales could ensure it continues to be provided free. It’s a back Potter Tags Campaign



1ppl milk price reduction for Meadow Foods – from 1st September (14th August 2015)


0.348ppl milk price reduction for Dairy Crest formula producers   (14th August 2015)

This takes effect from 1st September and widens the gap between the formula standard litre price @ 27.44ppl and Dairy Crest’s standard liquid price of 21.81ppl to 5.63ppl.


Arla launch the equivalent of the Arla Fair Trade Marque  (14th August 2015)


Arla have launched a farmer owned marque which from autumn will feature on all Arla branded UK products.


This is certainly not a silver bullet to solve the current dire situation in the industry but it will be heavily promoted with the aim of emphasising that the milk which goes into the products is responsibly sourced from its farmer owners who retain any profits. In addition the marque will confirm that the milk is produced to the highest expectations in terms of the environment and animal welfare.


Arla will include the logo/marque on all its branded products and should find it easy to win the support of major retail customers like Morrisons, Asda, Lidl and Aldi presumably allowing them to use the marque on own label dairy products processed by Arla subject to jumping through hoops one of which farmers will hope relates to fair pricing by the retailers involved. On reflection perhaps using the word easy in conjunction with British retailers is naïve! 


Morrisons could do with some positive PR and compliance with the marques terms of use and permission to utilise it would at least be a step in the right direction and signal that the retailer supports the Arla farmers.


Once one retailer supports the marque on own label others will be exposed. It won’t be universally popular and will have its critics but it’s a small smart positive step of encouragement and sends a clear message to consumers as to what they are buying & supporting.


In reality it’s similar to a Fair Trade mark and can only do good.


Morrisons 10ppl gimmick is possibly the best stunt Ian has seen   (14th August 2015)

Full marks to Morrisons who, in the space of hours, temporarily changed their position from the dairy industry’s villains and number 1 protesting target to become almost heroes.


On Tuesday Morrisons emerged from meetings with industry leaders to announce a new milk brand called “Morrisons Milk for Farmers” with a whopping 10ppl of the retail price going directly to its major supplier, Arla.


I guess leaders could hardly criticise Morrisons move having banged home to them that the majority of consumers are willing to pay more for milk if the extra money goes direct to farmers.  If that’s correct Morrisons have obliged and put the NFU’s theory to the test. 


Morrisons certainly pulled a rabbit out of the hat with this new brand.  In Ian’s opinion it’s a stunt, a gimmick and it will cost Morrisons nothing.


In reality it’s doubtful whether it will succeed following its autumn launch.  At the launch it is anticipated Morrisons may well oblige the NFU President Meurig Raymond’s request to


“make sure there is plenty of resources available to promote this product.  It must also be displayed prominently in store.”


So let’s assume it happens and retailers continue with their obsession to offer the cheapest milk as a loss leader and are still selling 4 pints for 89p.  The Morrisons Milk for Farmers will then sit along side the 89p milk at £1.12 for 4 pints.


The extra 10ppl will go to Arla as Morrisons dominant supplier but because Arla are a co-operative the money is not ring-fenced to GB but in the pot to benefit 13,000 members. See below for latest NFU gaff on this point.


Ian hopes it works and that all the farmers benefit but somehow history tells him it’s doomed to fail and could even experience a backlash before it is launched. If Morrisons are serious about helping they should cut the gimmicks and try to adopt the Arla Marque on all Dairy Products. See below reference cheese.


Once it’s on the shelves we will soon learn whether consumers are willing to pay an extra 10ppl but it’s a massive 26% uplift.


Only time will tell whether the Morrisons move will be sufficient to satisfy those who were protesting at Morrisons premises a week ago.


What Next?   (14th August 2015)

If I were Asda, Lidl & Aldi I would be banging on the NFU’s door offering my own variation on the farmers’ milk brand and agreeing to pay 10ppl or more direct to the farmers in the hope it buys more time and ensures protesting farmers stay away.  If that’s considered part of the solution all retailers should be pushed to do it.


Contrast Morrisons to the pledge retailer Booths have made   (14th August 2015)

Northwest retailer Booths have 32 stores and have pledged to pay the very best price for liquid milk to its farmers under their Fair Milk scheme.  Currently they pay their farmers 33ppl.  Now that’s worthy of real publicity and is certainly fair trade.


NFU Gaff in announcing Asda commit to pay 28ppl for 100% of its liquid milk   (14th August 2015)

According to an NFU press release Asda have delivered, what is undoubtedly, a significant improvement in the farmgate milk price it pays Arla for all of its liquid milk from next Monday 17th to 28ppl. However interestingly in the official Asda press release, which came out after the NFU’s there is no mention of the 28p and no mention of the money going to British Farmers.

In its press release the NFU state that the 28p “will then be expected to pass this onto its British Farmer suppliers.”

No way NFU because to do this would necessitate a complete re write of the Arla Co-op principles which 13,000 dairy farmers have signed up to. This would spark a Dairy War.


In addition it’s a dangerous road to even consider because it could be met with thankyou cards from the Danes & Swedes to the NFU. Think about it the Danes could say if that’s the game we will retain all the money from lurpack butter in Denmark.


Surely the NFU as a farmer organisation understand how a successful Co-op works and Arla are certainly not going to rewrite their constitution and rules to re nationalise its milk pricing.


NFU President Meurig Raymond commented “It is now important that Arla ensures this is delivered to British Farmers on the ground, with immediate effect.”

Oh dear perhaps more thought and less haste from NFU Communications department is required, because this is pants.


However, the move by Asda is seismic and on the issue of cheese it is already well ahead of Tesco and Morrisons for its Red Tractor support.


Milk is now 6ppl cheaper than bottled water   (14th August 2015)

That was the strap line in last week’s Grocer.  The research requires no further commentary.


Irish & New Zealand cheese & Milk – The facts on own label  (14th August 2015)

Here is a sample of cheeses found this week in two retail stores:


Morrisons Mature White Cheddar packaging confirms it is produced in the UK using British and Irish milk.


Morrisons Red Leicester packaging confirms it is produced in the UK using British and Irish milk.


Morrisons Milk White Cheddar packaging confirms it uses British and Irish Milk and is packed in the UK.


Tesco Everyday Value Grated Cheddar packaging confirms it’s produced in the UK, Ireland and New Zealand using milk from the UK, Ireland and New Zealand.


Tesco Everyday Value Mild Cheddar packaging confirms it’s produced in Ireland using milk from Ireland but packed in the UK.


Tesco Half Fat Mature Cheese packaging confirms it’s produced in Ireland but packed in the UK.


Those people at Adams, Leek (AKA Ornva Foods) are certainly busy bees packing all this own label cheese.


If you have further similar evidence please email us photographs of both sides of the packaging.


Cheese imports from Ireland equate to an estimate 100,000 tonnes annual equivalent which is a whopping 1 billion litres of milk. The Irish have virtually closed their market to British and Northern Irish produce and French farmer demonstrations are heading towards closing down their markets to foreign imports despite the EU market principles. If British consumers and food service back Red Tractor cheese 100% processors claim the farmgate price paid to farmers for milk for cheese would increase by between 3 to 5ppl.

That’s where the battle ground is with retailers and food service to keep the Irish cheese out.

If the French agriculture minister can state:

“In the current crisis, everyone is responsible, from the consumer to the local politician who must favour French products”

Why can’t all our leaders be nationalistic for once?


Medina and Freshways involved in Muller and Dairy Crest Deal  (14th August 2015)

The competition have announced that they are inclined to accept Muller Wisemans undertakings with a view to eliminating the need to progress to what would be costly multi million pound stage 2 in terms of fees etc.


The competition and Markets Authority have opened up a consultation period until October 19th with the proviso matters could be concluded earlier.

The proposed undertaking and remedy will see Muller Wiseman process around 100 million litres of milk a year for either Freshways or Medina for up to 8 years.

These two processors are considered by the CMA to be effective competitors to Muller. However it must be noted that Medina already trade large quantities of milk with Dairy Crest.

If the remedy is adopted and a deal struck it could be up and running by January 1st 2016.


24.5ppl milk for sale in Coventry   (14th August 2015)

Yes 2 litres of Country Life milk for only 49p at Kalma Foods, 629 Stoney Stanton Road, Coventry (Tel. No. 02476 272380).  Supplied by Johal Dairies.


Why wouldn’t you track your vehicles and equipment for £25 a year? (14th August 2015)

Pinpointpal can be used on all vehicles and machinery including quad bikes, tractors, trailers, and generators, the list is endless. It can also been used to track workers locations and mileage which in turn will increase productivity within the work place. For more information on the device contact Lydia on 01335 324594 or lydia@ipaquotas.co.uk.




2.35ppl (1.85 + 0.5) milk price reduction for suppliers to Bowland Fresh Milk with only 24 hours notice (PRODUCER NOTIFIED)   (7th August 2015)

The 1.85ppl reduction results in a producer base price of only 18.1ppl from August 1st.  In addition Bowland Fresh have raised the base price protein from 3.2% to 3.3%, which producers say is equivalent to a further 0.5ppl price cut on top of the 1.85ppl cut.  That equates to a milk price of only 17.6ppl.


0.8ppl milk price reduction for Muller Wiseman suppliers – from 7th September  (7th August 2015)

This takes producers standard litre price down to 22.35ppl.


1ppl milk price reduction for suppliers to Glanbia – from September 1st    (7th August 2015)  

This takes producers standard litre price down to 21.35ppl. 


In addition, from 1st January Glanbia’s standard litre will be based on 4.2% butterfat & 3.4% protein following the earlier decision by independent milk price analyst, Stephen Bradley of www.milkprices.com to change the manufacturing cheese milk price constituents in his standard litre comparison to these levels.


0.9ppl milk price reduction for suppliers to Heler’s Cheese (PRODUCER NOTIFIED) – from September 1st    (7th August 2015)


Fonterra slash its forecast milk price by 27% in only 10 weeks to only 12.2ppl    (7th August 2015)

On the 28th May Fonterra set its opening forecast farm gate milk price at $5.25 per kg of milk solids for the 2015/2016 year.  Today, only 10 weeks later, that forecast has been slashed by 27% to only $3.85 due to “a continued significant imbalance in the global dairy market between weak demand and surplus supply”.


New Zealand dairy farmers have an estimated break even cost of production of around $5.30/kg ms.


The equivalent UK standard litre price at today’s exchange rate is 12.19ppl with a total forecast payout including a co-op dividend of 13.78ppl.


GDT results (continued)   (7th August 2015)

Tuesday’s catastrophic auction results were partly due to a 78% increase in the volume of WMP offered.  In addition, it is clear that a significant volume of the product sold was at the opening bid equivalent to a reserve price.


The WMP average at $1590/tonne (US) is equivalent to half the average New Zealand cost of production.


The next auction will be on 18th August when prices are almost certain to fall further.


How big is the UK’s milk problem?   (7th August 2015)

Muller’s bean counters have been doing some interesting number crunching.  The extra 1.6 billion litres of milk we have produced in the last 12 months represents 80,000 ex-farm tanker loads equivalent to a whopping 220 extra loads a day or 40 pints of extra milk for every person in the UK.


NISA driving down milk prices   (7th August 2015)

Ian has received a copy of a circular letter from NISA (the so-called family of independent grocer’s) sent out dated 4th August where they say:


“This is the latest step in our continual aim to drive down members cost of fresh milk.”


In the letter they inform members of a 4.5ppl saving bringing down the price of 2 litres of milk.


NISA will certainly attract the attention of protesting farmers with such antagonist statements.  A copy of the letter is in FFA’s inbox.


Morrisons – Number 1 target of protesting dairy farmers   (7th August 2015)

For obvious reasons protesting dairy farmers have this week focussed their efforts on Morrisons, Asda, Lidl & Aldi.


Rather than seeking to sit round the table with leaders of the protesting farmers Morrisons decided to issue an ill thought out antagonistic letter to the protesters, which was interpreted as Morrisons stamping their authority as to who is really in charge and sticking two fingers up at dairy farmers.


The letter refers to “potential personal liability”, “we reserve the right to commence court proceedings”, “injunction”, “reserve the right to commence trespass actions against you personally”, “Personally liable for the financial consequences of these protests and the court proceedings which follow.”


And, in bold print “we have and are arranging for further evidence to be gathered about your identity.”


“We may use CCTV footage; take photographs of individuals or vehicles present.”


The letter closes yours faithfully but with no individuals name attached, however, the name Darren Blackhurst, Morrisons Group Commercial Director, is one name on farmers’ radars, even though he has been on annual leave this week.  He is ex-Tesco and B&Q and nicknamed “Captain Chaos” on account of his reputation for firing first then thinking about what he has done later.  Note, the original Captain Chaos was diagnosed with a multiple personality disorder.


David Handley’s response on the FFA news page summed it up “All we want is a fair price, a living wage and be able to make a profit from our business.”


Handley has also stated publically that FFA would prefer to meet face to face with retailers.  In the case of Morrisons, if they are serious they need to wheel out Dave Potts, their CEO and not send stand in substitutes who have little or no power to change anything.


Note, when Radio 4 Farming Today attempted to arrange to speak to a representative of Morrisons ahead of this morning’s programme they simply hung up on them.  Second choice to a Morrisons representatives was yours truly who also has numerous nicknames!


The Milk Trolley Challenge is viral   (7th August 2015)

Protesting farmers buying up all the milk, especially in Morrisons but also in Asda, Lidl and Aldi is spreading like a forest fire across the UK and attracting worldwide interest.


OMSCO secure new export contracts   (7th August 2015)

OMSCo, who process milk from 250 UK organic members’ farms, have secured further export business to the USA with its organic mozzarella.  The expectation is that 800 tonnes of Mozzarella will be made and exported in the first year.


OMSCO’s total organic cheese production is expected to be around 1800 tonnes a year.


Putin destroys around 9 tonnes of EU cheese   (7th August 2015)

Russia has marked the first birthday of its ban of EU dairy products by destroying 9 tonnes of cheese plus 300 tonnes of other products and showing the destruction on Russian TV.


The move has caused outrage in a country where over 20 million people try to survive below the poverty line.  Around 170,000 people have signed a petition criticising the stunt, however, its doubtful their protests will prevent further destruction.


CHEAP MILK   (7th August 2015)

Mobil garage, Oxford – Buy a loaf of bread and take 2 pints of milk for 1p so half a pence a pint.


CAR FOR SALE    (7th August 2015)

Unfortunately, Ian’s wife’s Audi A5 TDI Quattro Cabriolet S Line 3.0 litre automatic diesel is back on Ebay and ends Sunday 16th August 2015.  In brilliant red, new July 2009, only 32,000 miles. 


Click link for further details:  http://www.ebay.co.uk/itm/271950598283?ssPageName=STRK:MESELX:IT&_trksid=p3984.m1555.l2649


Another Disastrous GDT result with prices down 9.3% – (4th August 2015)

Volume of product on offer at todays auction was significantly increased and prices continued to crash. So much so that there are even calls from some producers that the auctions should be suspended.


Todays prices plummeted to average $1815 tonne.


Key movers were:


SMP           down     14.4% to average $1419 approximately £997

WMP          down     10.3% to average $1590 approximately £1,117

Butter         down     6.1% to average   $2293 approximately £1,610


Its grim and its looking like a very long tunnel with some analysts now suggesting low prices will persist throughout 2016.


1.5ppl (-0.5 + 1.0) milk price reduction for South Caernarfon Creameries Limited producers (PRODUCER NOTIFIED) – from September 1st – (4th August 2015)

In early July SCC confirmed a 0.5ppl price reduction for 1st September, however, this has now been tripled to 1.5ppl.


This results in a liquid standard litre price of 20.84ppl and a manufacturing one of 21.53ppl (www.milkprices.com)


1.4ppl milk price reduction for Dairy Crest liquid suppliers – from September 1st  – (4th August 2015)

Dairy Crest have held their liquid price for six consecutive months but it’s come to an abrupt end with the announcement of a 1.4ppl September price cut and the reality is further cuts are almost inevitable.


This results in a liquid standard litre price of 21.69ppl (www.milkprices.com)


Dairy Crest’s Davidstow milk for cheese price remains unchanged at a healthy 25.34ppl (www.milkprices.com).  At least in this environment it looks to be a healthy price.


Dairy Crest’s organic price also remains unchanged at 38.43ppl (www.milkprices.com)


0.5ppl milk price reduction for First Milk members (PRODUCER NOTIFIED) - from 1st August  – (4th August 2015)

First Milk have copped for criticism over the fact this latest cut only gave producers ½ a days notice as First Milk abandon part, if not all of the Voluntary Code. We assume the 0.5ppl is an across board reduction.


This should result in the following standard litre prices (to be confirmed)


The Midlands & East Wales balancing Pool 18.1ppl

Mainland Scotland 18.8ppl

North of England 19.0ppl

Haverford West 19.67ppl

Lake District 19.70ppl


0.5ppl milk price reduction for Paynes Dairies suppliers (PRODUCER NOTIFIED) – from 1st August  – (4th August 2015)

Standard litre to be confirmed but expected to be 21.2ppl.



1.50 Euro Cents Friesland Campina farm gate milk price reduction – (4th August 2015)

Friesland Campina have reduced producers August milk price by €1.50 to €28.50 per 100kg. This is a 5% reduction in one month and compared to FC’s August 2014 price it equates to a 28% year on year drop.


www.milkprices.com calculates when this is standardised to a UK standard litre it comes out at 19.4ppl.


FFA takes the crisis to retailers and the public – (4th August 2015)

The current crisis down on the dairy farm is wrecking generations of farming families’ efforts and aspirations.


FFA are holding a series of rallies and protest with two big ones planned for this Thursday (6th) in Somerset/Devon and Cheshire.


The gathering of dairy farmers will not simply be a protest or a blockade because it comes with an invitation to the general public to come along and meet grass roots dairy farmers to understand how grim the situation is and how the outlook is to get worse.

Numbers of farmers attending protest meetings is increasing as the level of discontent rapidly escalates with the continual erosion of milk cheques.


For details log onto:             www.farmersforaction.org            tomorrow and Thursday


Morrisons importing Irish cheddar – (4th August 2015)

Morrisons are poking a tiger and waving two fingers to British dairy farmers with their constant promotion of Irish cheddar at £2 for 350grams as well as similar offers for their own brand cheddar, which is understood to be Irish.


AMPE falls to only 16.7ppl– (4th August 2015)

The July AHDB (DairyCo) AMPE figure now stands at only 16.7ppl and the lowest on record for 13 years. In only 15 months AMPE has halved in value.


MCVE stands at 21.7ppl, the lowest for 8 years.


Intervention stay open for longer – (4th August 2015)

Intervention will remain open until the 31st December which is a 3 month extension. A new campaign will then open on January 1st with new limits.

To date 1176 tonnes of SMP from Poland, Lithuania and Belgium have already gone into store and the expectation is that the 109,000 tonne limit will quickly be reached at Euro 1698 tonne (£1190).


100% sign up for Dairy Crest’s DPO – (4th August 2015)

Dairy Crest Direct report a 100% member sign up to its new DPO


Kent County Council support the French – (4th August 2015)

It could only happen in one of England’s home counties but as stupid as it sounds Kent County Council have been handing out French Evian bottled water to lorry drivers on the M20.I bet the French are handing out fresh chilled French milk to all drivers on the other side of the channel.


ATTENTION ALL READERS – (4th August 2015)

Note, we are increasingly relying on readers of this bulletin to inform us of price movements because a number of milk processors are now failing to notify us.


Please email gayle@ipaquotas.co.uk, if possible, with a scanned copy of any notification, which will remain confidential.


Those price adjustments not notified to us by the milk processors are noted with the red words (PRODUCER NOTIFIED)


0.85ppl milk price reduction for Arla direct contracted suppliers – from 1st September   (24th July 2015)                                               

This takes producers standard litre price to 20.15ppl. (www.milkprices.com)



0.8ppl milk price reduction for Arla members (Arla Amba) from 3rd August   (24th July 2015)

This takes producers standard litre price, before to 23.01ppl. (www.milkprices.com)



United Dairy Farmers stand on for May deliveries (24th July 2015)

Co-operative United Dairy Farmers of Northern Ireland held their May peak production at 21.4ppl which produced a standard litre price of 21.9ppl. (www.milkprices.com)


United Dairy Farmers Kendal milk price was unchanged at 24.39ppl



Some farmers try to switch from “Compete to Grow” to “Shrink to Survive  (24th July 2015)

Regrettably the market sentiment across the world is worryingly negative with all respected analysts having written of any possibility of any sort of ex farmgate price recovery in 2015 and some even questioning whether a glimmer of light will be seen until the second half of 2016 and one or two privately talking into 2017. 


Holland’s milk production is up 10% in June and Ireland is reported to be up 12.5% in April and May.


There appears to be two alternatives.  A Natural disaster/weather event pops up to cut production or producers cut production.


Those in the UK planning to milk cows out and then cull them could be in for a shock when it comes to booking cull cows in this autumn.


It’s almost two years to the day that the NFU launched its strategy “Compete to Grow” and two years later some of those who decided to push on are in a financial stranglehold and are now facing the need to shrink to survive.  Some farmers are in serious financial trouble and there is not even a glimmer of light at the end of a very long tunnel.



Lithuania SMP is first to head for Intervention  (24th July 2015)

Lithuania is the first member state to request the placement of close to 200 tonnes of SMP into public intervention storage but they certainly won’t be the last.



Graham’s The Family Dairy drops 7ppl B price bombshell on…Scotland’s family dairies   (21st July 2015)

Robert Graham, MD of Graham’s “The Family Dairy”, from Stirling, Scotland wrote a letter on the 9th July to the firm’s 100 or so family dairies, which in one fell swoop savaged the incomes of around 60 farms.


Graham’s were one of the first UK processors to introduce A&B pricing, and grabbed the headlines last week by being the first to impose a B price of between 6 to 7ppl (estimated for August and will soon be closer to 6 than 7ppl) for unwanted surplus litres.


In the letter Robert Graham states “to this end we must reduce the price paid on the ingredient litres (aka the B litres) to 50% of AMPE”. In addition there was a 1.5ppl cut to the firm’s A price, which probably can’t be argued with given the state of the market and is still a healthy liquid standard litre price.


Under the Graham’s formula for August producers will receive 23.75ppl on the A litres (based on 90% of a farm’s 1st September 2013 to 30th August 2014 production) and the B litre price will be paid on the rest. This will affect at least 60 of the 100 or so Grahams producers, and will reduce their income by an estimated £180,000 each month, or equivalent to £3000 per farm per month for those affected.


The NFUS believe that Graham’s will be the only GB milk buyer paying 10ppl or less for any of their milk.


Emails to Ian show the main bone of contention is that producers spent time providing the company with  2015 production forecasts, which they believe have proved to be accurate. If that is true then they believe Graham’s should have anticipated the milk they have received and managed their pool better. But according to Robert Graham some of the 60 B milk producers are 30% to almost 50% above their 100% allocation.


In addition, during 2015, Graham’s have supposedly had new producers start to supply them and others are in the pipeline and due to start to supply soon. However Ian has verified that the agreement to take on four farmers goes back a year or more, so while this is unpalatable it is not untoward and is a case of Grahams honouring their commitment and not dumping anyone.


Farmers believe that as part of the Graham’s “family” the B price move warranted a producer meeting to discuss the issues and agree a way forward rather than receive the bombshell letter. With hindsight the indication is that Grahams agree they could have handled the situation better. Their letter came out of the blue and rocked the industry and resulted in serious heartache on the farms affected.


However whilst a producer meeting to transparently explain the problem would have been preferable the outcome would not have been different. Basically Grahams producers are sending the Company in excess of 1.5 million litres of milk each month which the firm are having to sell into a very weak spot market, mainly in England & Wales, for under10ppl delivered at present and weakening.


One producer commented “I remember your father’s words when I joined Graham’s: We are only looking for young ambitious men who want to expand their businesses in a similar way to us.”


He agreed it’s those same ambitious farmers who have been hit hard with this short notice price B price annihilation.

So Graham’s have created a PR problem and next month, they have a planning meeting for a new dairy where they may need some friends in high places.


On further examination the basic problem is Grahams have 11% (1.5 million litres surplus) more milk each month than they have customers for. Options available to them were as follows:-


a.     Give notice to some producers. That is harsh and takes months to affect total milk intake and how are they selected? Presumably starting with those who produce the highest percentage of B litres.


b.     Cut the A price by more but that penalises the 40 who have not expanded and kept within the limits and appears unfair.


c.     Reduce the A volume from 90% to say 80 or 85% - that penalises the wrong farmers i.e; those who have not expanded.


d.     Do nothing and dig a financial black hole- not an option


e.     Penalise the farmers who are producing the extra milk by halving the B price.


Its harsh for those who have expanded believing they could spread their fixed costs receiving the AMPE price on their B litres at 14.8ppl (June price).  Note the Grahams B price is transparent and takes AMPE less 2ppl haulage less 5% processer margin and from August 1st less 50%.  This price is independently calculated by Stephen Bradley www.milkprices.com.  So it might be a low price but it is still very transparent.


Whilst there is no volume limit for Grahams farmers the move has instantly affected production with one producer switching from x3 to x2 day milking.


The dilemma faced by Grahams is unfortunately not unique and partly attributable to aggressive retail discounting of milk together with one or more predating processors attempting to undercut the existing liquid supplier.

In some cases it’s a case of either cut the price you charge us for the milk or risk loosing some volume.


Spotted on the Graham’s Family Dairy website  (21st July 2015)


As a family we’re all used to mucking in. And mucking out.” As one farmer quipped: “There’s enough shit flying around Scotland now to keep them busy for a while.”


Please can we draw your attention to the letter at the bottom of this report from Dairy UK’s Farmers Forum on generic promotion and protection of dairy products.


 It is an important subject and replying will only take a few seconds. Send your reply to us if you prefer as we are more than happy to receive it.


Let’s get a lot of responses in so we can really debate this subject!



Letter from The Farmers Forum:


Dear fellow producer,


The Farmer’s Forum has been debating whether in the current climate, we as an Industry are making the best of promotional and educational opportunities. The end of quotas, for example, does pose the question that if more milk is being produced, are we doing everything we should be doing to maximise the understanding of dairy foods and drive up demand?


We your fellow producers on the Farmers’ Forum believe it is important to gather as much valuable information on this issue from you directly. We have accumulated much anecdotal evidence already that you would like to see more investment in promotion to, and education of, the consumer.


In order for us to play an active role in addressing this issue we need your help in answering the following two questions.


1.     Do you support financial investment in the generic protection and promotion of all dairy products and the education of consumers with professionally-researched activity such as promotion, marketing or sponsorship? 

2.     If the answer is yes, how do you think such industry-wide activity could be funded?

Rest assured your answers count. They will be treated in confidence and will be used to take this issue forward, hopefully stimulating constructive dialogue across all sectors within the industry.


We need your help in answering these questions and would ask you to send your replies either to us at farmersforum@dairyuk.org or reply to the email sent to you, preferably by the end of July.



Alternatively reply to this bulletin with a “Yes” or a “No” in the subject and your comments.



Ian’s wife’s Audi A5 TDI Quattro Cabriolet S Line 3.0 litre automatic diesel.  In brilliant red, new July 2009, only 32,000 miles.  On Ebay ends 10pm Sunday 26th July …. http://www.ebay.co.uk/itm/271931842592?ssPageName=STRK:MESELX:IT&_trksid=p3984.m1555.l2649




Carole’s late father’s Silver Ford Mondeo Zetec TDI, new 2002, he had it from new.  On Ebay ends 10pm Sunday 26th July ….. http://www.ebay.co.uk/itm/271931843618?ssPageName=STRK:MESELX:IT&_trksid=p3984.m1555.l2649


0.169ppl Dairy Crest formula contract deduction – from August 1st   (17th July 2015)

This results in a standard litre price of 27.788ppl (www.milkprices.com).  This gives a 4.578ppl price differential between milk supplied under the formula contract to that supplied under the standard DC contact (23.21ppl).


0.5ppl milk price reduction for suppliers to South Caernarfon Creameries – from August 1st  (17th July 2015)

Plus a further 0.5ppl reduction from September 1st


Disaster as GDT crashes a further 10.7%(17th July 2015)

This week’s GDT result could not have been worse with the average price down 10.7% as the 9th consecutive fall was recorded.


This is now seriously desperate and world wide cows will surely be culled en mass to cut production and expenses.  In the case of SMP the average price of $1702 tonne equates to under £1100 a tonne or €1550 tonne, which is €148 below the intervention price of €1698 tonne.


Readers might ask why a processor would sell product at €148 per tonne below the intervention price? The reason is the intervention payment terms are 120 days and processors need the cash flow now. Having said that EU product is expected to go into intervention within the next 2 weeks.


For weeks we have said it couldn’t get worse but it is and the next auction on August 4th sees volumes on offer go vertical with 60% more product on offer. 


Within this figure WMP volumes will increase by a staggering 88% from this weeks 15,575 tonnes to 29,550 tonnes and SMP product to increase by 39% - ouch.  The likely outcome can only be more price pain.


Key auction results from today were:


Cheddar                  down                 13.9%   to average $2613 tonne (£1680)

WMP                                  down                 13.1%   to average $1848 tonne (£1190)

SMP                                   down                 10.1%   to average $1702 tonne (£1095)

Butter                                 down                 9.5%     to average $2460 tonne (£1585)


Most of the product sold was on one bid by each buyer at the opening/reserve price which is not good news.


At next week’s Royal Welsh Show the European Commissioner, Phil Hogan will surely be challenged on his stance that the EU dairy industry is not in crisis. Surely this is a CRISIS!


Houston we have a very serious and big problem.


Graham’s The Family Dairy drops 7ppl B price bombshell on…Scotland’s family dairies (17th July 2015)

Ian’s take on the above headline will be posted on our website on Monday and feature in next weeks bulletin, following detailed conversations with both Grahams producers and Robert Graham Snr. 


35% of Gigha’s cows go in one hit (17th July 2015)

The four remaining dairy farmers on the Scottish island of Gigha, who supply First Milk, will be down to only 3 following Dan Jackson’s decision to quit at the end of this month.


This will leave three producers with around 180 cows in total, making the viability of dairying on the island very finely balanced.



Letter from The Farmers Forum:


Dear fellow producer,


The Farmer’s Forum has been debating whether in the current climate, we as an Industry are making the best of promotional and educational opportunities. The end of quotas, for example, does pose the question that if more milk is being produced, are we doing everything we should be doing to maximise the understanding of dairy foods and drive up demand?


We your fellow producers on the Farmers’ Forum believe it is important to gather as much valuable information on this issue from you directly. We have accumulated much anecdotal evidence already that you would like to see more investment in promotion to, and education of, the consumer.


In order for us to play an active role in addressing this issue we need your help in answering the following two questions.


2.     Do you support financial investment in the generic protection and promotion of all dairy products and the education of consumers with professionally-researched activity such as promotion, marketing or sponsorship? 

3.     If the answer is yes, how do you think such industry-wide activity could be funded?

Rest assured your answers count. They will be treated in confidence and will be used to take this issue forward, hopefully stimulating constructive dialogue across all sectors within the industry.


We need your help in answering these questions and would ask you to send your replies either to us at farmersforum@dairyuk.org or reply to the email sent to you, preferably by the end of July.


Alternatively reply to this bulletin with a “Yes” or a “No” in the subject and your comments.




Last week’s cheap milk at The Livestock Event  (17th July 2015)

Thank you to all the code crackers who confirmed that last week’s cheap milk on sale at the NEC for 25ppl, which was an increase from the 16ppl the same milk was on sale the previous week came, from Wells Farm Dairy.





Ian’s wife’s Audi A5 TDI Quattro Cabriolet S Line 3.0 litre automatic diesel.  In brilliant red, new July 2009, only 32,000 miles.  On Ebay ends 10pm Sunday 26th July …. http://www.ebay.co.uk/itm/271931842592?ssPageName=STRK:MESELX:IT&_trksid=p3984.m1555.l2649





Carole’s late father’s Silver Ford Mondeo Zetec TDI, new 2002, he had it from new.  On Ebay ends 10pm Sunday 26th July ….. http://www.ebay.co.uk/itm/271931843618?ssPageName=STRK:MESELX:IT&_trksid=p3984.m1555.l2649



Disaster at GDT crashes a further 10.7%   (15th July 2015)

Today’s GDT result could not have been worse with the average price down 10.7% as the 9th consecutive fall was recorded.


At next week’s Royal Welsh Show the European Commissioner, Phil Hogan will surely be challenged on his stance that the EU dairy industry is not in crisis. Surely this is a CRISIS!


This is now seriously desperate and world wide cows will surely be culled en mass to cut production and expenses.  In the case of the SMP the average price of $1702 tonne equates to under £1100 a tonne or €1550 tonne, which is €148 below the intervention price of €1698 tonne.


For weeks we have said it couldn’t get worse but it is and the next auction on August 4th sees volumes on offer go vertical with 60% more product on offer. 


Within this figure WMP volumes will increase by a staggering 88% and SMP by 39% - ouch.  The likely outcome can only be more price pain.


Key auction results from today were:


Cheddar                  down                 13.9%   to average $2613 tonne (£1680)

WMP                                  down                 13.1%   to average $1848 tonne (£1190)

SMP                                   down                 10.1%   to average $1702 tonne (£1095)

Butter                                 down                 9.5%     to average $2460 tonne (£1585)


Houston we have a very serious and big problem.


1.5ppl milk price reduction for suppliers to Paynes Dairies - with immediate effect from July 1st    (10th July 2015) 

This takes producers standard litre price down to 21.7ppl (www.milkprices.com).  This is the shortest notice cut we have heard of and it’s by far the biggest July 1st price cut.


1.5ppl milk price reduction for suppliers to Fayrefield Foods – from July 22nd   (10th July 2015)

This takes producers standard litre price down to 19.5ppl (www.milkprices.com).  Note, this is a “clean price” with no seasonality, transport charge, capital retention or retrospective balancing charge.


1.15ppl milk price reduction for suppliers to Belton Cheese - from August 1st    (10th July 2015)

This takes producers standard litre price down to 23ppl (www.milkprices.com)


1ppl milk price reduction for suppliers to Joseph Heler Cheese – from 1st August    (10th July 2015)


1ppl milk price reduction for suppliers to Barbers Farmhouse Cheese – from 1st July    (10th July 2015)

This takes producers standard litre price down to 24.64ppl (www.milkprices.com).  Note, there is also a further 1ppl reduction from 4th August.


1ppl milk price reduction for suppliers to Meadow Foods – from August 1st    (10th July 2015)

This takes producers standard litre price down to 20ppl (www.milkprices.com)


0.75ppl milk price reduction for suppliers to Pensworth Dairy – from August 1st   (10th July 2015)

This takes producers standard litre price down to 22.65ppl (www.milkprices.com)


0.75ppl milk price reduction for suppliers to Yew Tree Dairy (AKA Woodcocks) –from August 1st    (10th July 2015)

This takes producers standard litre price down to 23.75ppl (www.milkprices.com)


0.37ppl milk price reduction for suppliers to the Co-operative Group (CDG) via Muller Wiseman – from August 1st    (10th July 2015)

This takes producers standard litre price down to 28.32ppl (www.milkprices.com)


Tesco announce a comprehensive review of TSDG – The status quo is not an option    (10th July 2015)

Tesco aligned producers have been put on notice that Tesco have started an in depth comprehensive review of the Tesco Sustainable Dairy Group (TSDG), which has run for close to 8 years.


The review will cover everything and some of the key phrases from the letter for farmers to focus on are as follows:


1.     The letter is from Tesco’s Commercial Director of Fresh Food & Commodities and not from the Tesco Dairy Agriculture Manager.


2.     ….. allows us to adapt the TSDG to the industry changes we have seen, and make it sustainable into the future.” This means sustainable for Tesco as well as the farmers.



3.     Fairness – we want to pay a fair price for our milk and reward farmers who are driving performance, efficiency and standards” This means the current model is almost certain to change by the next price review date of November 1st.


4.     96% of you told us (Tesco) that you have benefitted from being a member (of TSDG).  It’s a pity the other 4% didn’t top it up to 100%.



5.     “We want you (the supplying farmers) to be part of this process.  Your views and opinions really matter to us.”


Whilst Tesco will listen to producers opinions I suggest you forget it if your opinion is simply stating we need the money.  All Tesco core farmers will have to get involved in this review or face the consequences if they simply leave it to their respective processors committee members and then scream when the outcome is not to their satisfaction. 


I asked one Tesco committee member how many times he had been thanked for his efforts and he said “once with dozens of criticisms”.  Comments welcome but for Tesco suppliers it’s time to be on the pitch in attack and defence not on the side lines chanting and hurling abuse!


Defending the status quo is, in my opinion, indefensible and not an option.  There will be change and it’s best done by negotiation and consent.


The outlook for 2015 is grim   (10th July 2015)

Regrettably both the EU and world dairy outlook for the second half of 2015 is nothing short of very grim. There are even signs that some European processors are on the brink of supplying product into intervention, which now seems to be inevitable by August at the latest.


Next Wednesday will be the next fortnightly GDT auction and already analysts are anticipating another 10% fall in the key product auction price of WMP with more falls expected in August as the quantity of product on offer rockets up.


1500 jobs to go   (10th July 2015)

Fonterra is expected to cut around 1500 jobs as part of a wholesale restructure and streamlining.


Cheap milk at NEC Livestock Event at 25ppl   (10th July 2015)

There is nothing like rubbing dairy farmers’ noses in it. Several eagle eyed farmers were quick to alert Ian to the fact Eden Fresh Milk was on offer at the NEC for 25ppl.


At least it was going up in price because they claimed that last week it was selling at the NEC for 16ppl or 6 litres for £1.  Perhaps the RABDF suggested the price should be increased for the duration of the event.


Could one of our readers please confirm who processes and packs Eden milk?


Grim GDT auction results with WMP down 10.8%!!   (3rd July 2015)

Wednesday’s GDT auction results were grim with the all products average down 5.9% with the biggest hit coming in the form of a brutal 10.8% drop in WMP prices leaving them only just above $2,000 (US) a tonne averaging $2,054.


This hurts because both in New Zealand and globally the WMP price is a huge influencer in determining farm gate milk prices.  Such low prices were last seen 6 years ago in July 2009.


Note, in exactly 12 months the auction value of SMP has more than halved to what it was in July 2014 when prices started to tumble big time and it’s not ended yet.


Note, the volume on offer at this week’s auction was more than 40% up on the volume put forward only two weeks ago with 30,000 tonnes forward.


There is only one question everyone is asking:


How long will global dairy prices continue to drop before they bottom out?


Despite the continued downward spiral the EU’s Agriculture Commissioner Phil Hogan maintains “there is no crisis in the dairy sector”.  Well it looks like a crisis to Ian.


Key prices from the auction

WMP                                  down                 10.8%   to average         $2054/tonne

SMP                                   down                 5.8%     to average         $1875/tonne

SMP Arla Westbury                                                             None on offer

Cheddar                  down                 4.9%     to average         $3060/tonne

Butter                                 down                 0.3%     to average         $2694/tonne


1ppl milk price reduction for Muller Wiseman non-aligned producers – from 1st August   (3rd July 2015)

This takes producers standard litre price down to 23.15ppl (www.milkprices.com)


1ppl milk price reduction for Glanbia Cheese suppliers – from 1st August    (3rd July 2015)

This takes producers standard litre price down to 22.91ppl (www.milkprices.com)


1.5ppl milk price reduction for Grahams Dairies (Scotland) suppliers – from 15th July    (3rd July 2015)

This takes producers standard litre price down to 23.75ppl (www.milkprices.com)


1ppl milk price reduction for Crediton Dairies suppliers – from 1st August     (3rd July 2015)

This takes producers standard litre price down to 25.36ppl (www.milkprices.com)


0.25ppl milk price increase for Dairy Crest Direct Davidstow suppliers – from 1st August    (3rd July 2015)

This increase is in recognition of the new production standards farmers have to adhere to and comply with in preparation for DC’s exciting infant formula production facility.


It’s the first increase the farmers have had since November 2013 and increases producers standard litre price to 25.34ppl (www.milkprices.com)


Stand on for August milk prices for Dairy Crest liquid suppliers    (3rd July 2015)

This will bring the Dairy Crest liquid and Muller Wiseman non-aligned standard litre prices almost on parity, which will help oil the wheels for the buyout of Dairy Crest’s liquid business when it is given the green light later this year.


Dairy Crest liquid standard litre price 23.09ppl v Muller Wismans 23.15ppl.


Stand on for Dairy Crest’s organic milk price for August – standard litre price 38.43ppl.    (3rd July 2015)


95.3% of Dairy Crest Direct farmers sign up to DPO   (3rd July 2015)

Dairy Crest Direct (DCD) have signed up 95.3% of their 1050 supplying members to their DPO (Dairy Producer Organisation).


A key feature of the DPO status is it will ensure future contractual term variations and price changes will be by negotiation and not at Dairy Crest’s discretion.


The wonder is why only 95.3% have signed up and not 100% unless the remaining 4.7% who haven’t signed are planning to exit the industry.  On that score if only 4.7% hang the clusters up in the next 12 months that could be a fantastic result.


1ppl milk price reduction for First Milk  A price milk – from 1st July  (30th June 2015)

The reduction is across the board with the exception of those in the Midlands balancing pool whose reduction will be 0.7ppl.


The resulting new www.milkprices.com standard litre prices will be as follows:


The Midlands & East Wales balancing pool 18.6ppl

Mainland Scotland 19.3ppl

North of England 19.5ppl

Haverfordwest  20.17ppl

Lake District 20.2ppl


After deduction of the 2ppl capital retention plus the 80:20 mix of A and B prices means at least an estimated 3ppl will be deducted from producers delayed payments to the bank and that’s before any adjustments are made in respect of individual profiles.


This effectively gives a standard litre paid into the bank of between 15.8ppl and 17.2ppl.


Note, First Milk’s forecast July B milk price is between 14ppl to 17ppl, however, it’s a certainty if will be closer to 14ppl than 17ppl.


Finally, in making the announcement with only a week’s notice of the price change to members First Milk has, on this occasion, abandoned the Voluntary Code of Practice.


I don’t think anyone will criticise them for that move on two counts.


One is why should they subscribe to the code when it comes to price changes, when others clearly don’t?


Secondly, they have to do what they have to do to ensure they stop the barmy practice of paying members more money for milk then they can obtain from the market place. Simple.


1.18ppl milk price reduction for Arla AMBA members - from 6th July   (30th June 2015)

This is made up of a 1 Euro Cent across the board price reduction (0.77ppl) on a UK standard litre plus 0.41ppl reduction as a result of the currency smoothing mechanism adjustment


This takes producers standard litre price to 23.81ppl (www.milkprices.com)


1ppl milk price reduction for Arla Directs - from 1st August  (30th June 2015)

This takes producers standard litre price down to 21ppl (www.milkprices.com)


EU milk production is a problem   (30th June 2015)

An estimated 5% increase in May milk production is estimated as recorded and more seriously it equates to the need to increase exports by a whopping 40% in order to shift the additional product from this extra milk.


Individual countries positions are as follows:


Southern Ireland production in April +14.5%

Italy production in April + 9.7%

Holland production in May + 7.5%

Poland production in April + 4.1%

In the case of the USA, production for May was +1.4%


Little wonder no one is predicting that ex-farm gate milk prices may have bottomed out.


Sir Jim Paice to stand down as Chairman of First Milk  (30th June 2015)

Following on from his comments as to the need for commercial and business skills on the board of First Milk, Sir Jim has announced he is to stand down as soon as a replacement is agreed.


Two or three points spring to mind connected to this announcement. Firstly, he is sure to shortly be followed by others who will step down from the board of First Milk as it re-groups to execute Gallacher’s turnaround plan.


Second, there was minimal, if indeed, any recognition in the NFU’s press release/NFU reaction bulletin in terms of normal protocol, which many had expected would have included a line suggesting Sir Jim had done a good job. Not a word along these lines from either the President of the NFU or its Dairy Board Chairman, both of whom were quoted. The situation was even worse in the Scottish NFU’s press release of the same date.


New Chairman of Muller Wiseman Milk Group Board   (30th June 2015)

Philip Rowney takes over as Chairman of the group from Roddy Catto and in doing so represents 1200 dairy farmers who supply MW.


The press release paid tribute and thanks to the work of the outgoing Chairman.


“Roddy deserves enormous credit for the hard work, commitment and energy he has shown as Chairman of the MWMG board”


More than half of UK consumers are willing to pay more for milk - according to Mintel   (30th June 2015)

One of the leading market intelligence research companies, Mintel, have found that over 50% of consumers surveyed would be willing to pay more than £1 for 4 pints of milk.


So as retailers battle to sell the lowest price milk at 89p or less for 4 pints, in a bid to get customers through the door, Mintel is asking the key question.


“Whether that level of price cutting is needed?”


Pinpointpal    (30th June 2015)

Do you want to keep tabs on your vehicles, or equipment or people? Well allow us to point out the merits of Pinpointpal GPS tracking devices. Ian used one on his charity Classic Mini Trip from the tip of the North to the tip of the South of New Zealand and was so impressed IPA has become the main agricultural selling agents for the technology.


The trackers are simple to fit with just two wires (one live and one earth) and you can start monitoring movements and vehicle location straight away via the website or a smartphone app.


Ian is impressed with the fact that as sales grow the nice (British) people at Pinpointpal are investing more money in enhancing and introducing new features to the trackers for both existing and new users. They have now asked that we contact everyone who has purchased a tracker through us to find out whether there are any features they would like on their wish list. So if you’ve got any ideas please email sales@ipaquotas.co.uk.


There are many benefits of using a Pinpointpal tracker including:


·         Tracking stolen vehicles and machinery - including pressure washers and generators;

·         Reducing insurance discounts;

·         Tracking vehicle movements outside of working hours;

·         Health and safety to keep an eye on workers in upland or hill areas on ATV’s;

·         British made and supported.


Alerts can be delivered to mobiles, iPad, laptops, desktops, and these can tell the user as little or as much information as is required. For example, an alert can be sent if a vehicle moves outside of a pre-set distance from the farm or base.


We are selling the devices at an unbeatable price of £150 + VAT which includes two years tracking. After that it’s £25 year, which makes it by far the best value tracker on the market.


Please call Lydia on 01335 324594 or email her on sales@ipaquotas.co.uk to order, or for more information.


First Milk announce eye-watering losses of £22m  (19th June 2015)


First Milk have informed members that its losses for the financial year ended March 2015 will be around £22m equal to £61,000/day or nearly £2m/month. At least that has got the bad news out early, Tesco style, but the big question for its members will surley be by how much have these loses slowed down in April and May of 2015 and in what month do they budget to breakeven?


First Milk have consistently paid one of the lowest, if not the lowest, ex-farm gate milk prices, yet still they paid out more than they could afford to pay and have consequently returned to members for money to bridge the gap.


Several First Milk members who emailed Ian today seem to have come to the conclusion that all the blame sticks with the former CEO, Kate Allum. That may be a convenient place to hide but its unlikely to be the whole story.


The First Milk board have to accept responsibility for the part they have played in achieving these appauling results because they have a clear remit and it appears they have failed.


In today’s letter to members, Chairman Sir Jim Paice, has commented “Personally, I believe a business of this size needs a board with substantial commercial experience.” Apologies to all involved at First Milk but translating this means very few farmers will sit on the main board of First Milk.


On that statement Ian feels Sir Jim is bang on. But First Milk is a business, which is currently shrinking or at best holding its own in dirty water and it needs that commercial expertise asap. Ian is not sure whether those on the board at the moment know they have to leave, but for those who do realise they might be wise to move on prior to completion of the review.


The review of its governance cannot come soon enough because if Gallacher is to stand any chance of succeeding with his turnaround policy he needs more professionals on his board and not, with respect, enthusiastic amateurs who have played their part in todays financial announcement. But at the end of the day it’s up to the members to influence who is in and out of the board and, to express any dissatisfaction.


One of the options open to Muller is discounted  (19th June 2015)


Earlier this week Ian suggested one of the options open to Muller was to withdraw its £80m offer to buy Dairy Crest’s liquid business and walk away.


Ian is reliably informed that the deal was signed by both parties and will be concluded subject to Competition Authority (CMA) approval.


That means there are only two options available to Muller with one a near certainty namely that the deal is subject to an in depth scrutiny from the CMA under phase 2.  Quite why phase 2 has to take 6 months conclude to leaving 4,000 plus employees in limbo is beyond comprehension but I guess the CMA simply have rules, procedures & timelines.


However, for the retailer(s) or others who have already thrown spanners in the works with the CMA it’s time to produce the objections and evidence.


It’s put up or shut up time, because if I were Muller I would be seeking to settle for nothing less than unconditional approval.


Shore Capital suggested the complainant retailer could be ASDA, which is surely the least likely.  Let’s face it ASDA source all their GB liquid milk from one sole supplier Arla and don’t appear to experience any regional problems.  They surely have no grounds to raise any issues with the CMA.


European and world view   (19th June 2015)

The general view is that GDT Auction prices are unlikely to have stabilised or bottomed out this week.  Most, if not all, respected analysts are now of the opinion that it will be at least 12 months before we see signs of any substantial price increases.


UK, EU and world milk production is still increasing and this is not matched by increased demand.


In the case of the UK May production is estimated, by DairyCo, to be +2.5% at 1.37 billion litres compared to that recorded in 2014 and is record.


Whilst the average decline at this week’s GDT was small it has to be balanced with the fact the volume of available product amounted to only 21,800 tonnes and in two weeks time the tonnage will increase by 44% to 31,300 tonnes.  That will be a real test for the market.


Note, the Arla Westbury SMP sold at this week’s GDT actually sold for 95% of the current EU intervention price so it cannot really fall any lower.


New Chairman at Belton Cheese    (19th June 2015)

William Neville, former senior partner at solicitors Burges Salmon and the man considered the UK dairy industries legal guru and Rottweiler, is the new Non-Executive Chairman at Belton Cheese, Shropshire.


GDT average continues to head south – but  (16th June 2015)

Today's GDT all products average fell for the 7th consecutive time this time by the smaller margin of 1.3% to average US $ 2409 compared to the average achieved two weeks ago.


The positives, other than the fact the fall was smaller than recorded in recent months, was the fact many key products were either close to a stand on price or saw their average price improve.


Also the number of registered bidders continues to increase and today totalled 649 compared to 642 at the last auction and similarly the number of winning bidders increased from 115 to 125 which is encouraging


Key movers of interest:

Cheddar                  + 2.4% to average          $3128 tonne

Butter                                 +3.3% to average           $2707 tonne

WMP                                  0.1% to average             $2327 tonne

SMP                                   0.2% to average             $1978 tonne

Westbury SMP                    2.1% to average             $1875 tonne which is the lowest recorded average


0.661ppl milk price reduction for Dairy Crest Formula producers  (16th June 2015)

This is from 1st July and means the gap between the standard Dairy Crest price and the formula price is 4.747ppl.  The adjustment is predominantly as a result of a 20% plus fall in cream prices.


The resulting formula standard litre price will be 27.957ppl.


0.11ppl milk price reduction for Sainsburys (SDDG) – from 1st July   (16th June 2015)

This is a quarterly review and will result in the following standard litre prices:


Muller                     30.87ppl

Dairy Crest  30.81ppl

Arla                        30.75ppl


Bottled it!  Muller-Wiseman merger goes to phase 2   (16th June 2015)

This was a very appropriate headline from Shore Capital’s dairy analyst Clive Black as he reported on The Competition & Markets Authority (CMA) press release, which was bizarrely issued at 17:30 hours last Friday.


The £80 million bid by Muller to acquire the liquid business of Dairy Crest will now move to an in depth investigation under phase 2 “unless acceptable undertakings are offered by Muller to the CMA by this Friday, 19th.”


Throughout the press release there is no acknowledgement from the CMA that this deal simply has to take place because no business can continue to lose circa £15 million a year as Dairy Crest did last year in its liquid division.


Instead it’s obvious from the press release that one or more of our big retailers has objected to the deal on the grounds that there will be:

“a realistic prospect of a substantial lessening of competition in the supply of fresh milk to major grocery retailers with national scope (national multiples) in certain regions in Great Britain” commented the CMA in their press release.


In Ian’s opinion this points to one region with up to two national retailers who are the most likely to have objected.


The region is most likely to be the South West and the short odds are on a complaint from Sainsburys followed possibly by Morrisons.


The CMA has confirmed to Ian that the identity of objectors in phase 1 and/or the substance of their objection will not be publically disclosed.


In its press release the CMA goes on to state:

 “The CMA considers that the merger may lead to higher prices in the supply of fresh milk to national multiples and, in turn, for consumers.”


Clive Black accurately comments that “no one seriously believes that the Big Four (supermarkets) will charge more to customers for milk in Plymouth, Swansea and Taunton that the rest of the country.  Using an old fashioned milk industry term, therefore, has the CMA bottled it?”


He is spot on they have bottled it and completely ignored the farmer impact of the deal and have hidden behind one or more of our big 4 retailers – wimps.


Speculation over what the Muller team might do next   (16th June 2015)

As Ian sees it Muller have three options:


1.     They could simply say let’s go to phase 2 and let it run its 6 month course to Xmas.  They can do this in the full knowledge that the deal is almost certain to be approved at the end of phase 2.


2.     Assuming the South West is the region in question; Muller could offer to sell its Bridgwater liquid factory.  There must be more chance of Ian becoming an Olympic synchronised swimming gold medallist than that happening.  That’s a scary thought!



3.     Muller say to hell with it, we don’t need the aggro.  We will immediately withdraw the offer and let Dairy Crest’s liquid business bleed to death.


Option 3 looks tempting to Ian followed by option 1, however, given the deal is right for both parties and right for the UK dairy industry I suspect Muller will be determined that option 1 is the right avenue to pursue.


Arla Tesco farmers are 6ppl apart but for how much longer?   (16th June 2015)

The difference in the milk price received by Arla AMCO co-op members on a Tesco aligned contract and the Arla Tesco directs is almost 6ppl and must surely be at its widest point.


By 1st November Tesco are sure to reduce the price by at least the change in the cost of production if not more which will narrow the gap by a sizeable percentage.


As part of a costings review Arla have examined the 0.2ppl livestock Code of Practice enhancement paid to Arla AMCO members who supply Tesco and the result is the true cost is 0.48ppl.  Note, this premium is not paid to the Arla Tesco directs.


From 1st July the premium paid will increase from 0.2ppl to 0.48ppl.  In addition, a back payment of 0.6ppl to cover the top up from 1st January 2014 to 30th June 2015 will be paid to all Arla AMCO Tesco suppliers who are members at 31st December 2015.


There will be some who question why there is a delay in paying the top up payment.  We can only come up with one real reason and that is the delay is an attempt to persuade any Arla AMCO Tesco farmers contemplating serving 3 months notice to become Arla Tesco direct suppliers to not make that move.


In addition, by the time the 0.6ppl is paid the gap and the situation is likely to have changed, which coupled with the 0.6ppl top up is likely to influence some AMCO members.


Arla 0.5ppl levy is suspended again   (16th June 2015)

Arla AMCO members will not be paying the 0.5ppl levy for the three month period starting 1st July.  The holiday from the levy was in place from January to March then re-introduced from April to June.


Cheap Milk   (16th June 2015)

4 litres (7 pints) for £1.  Spotted in Premier Lea Village Convenience Store, Kitts Green Road, Birmingham – Milk from Paynes Dairies.


Morrisons have cut the price of 4 pints to 89p and in doing so have followed ASDA and Aldi.


Morrisons commented that the reduction will not affect the price they pay their dairy suppliers.  Yeah, yeah and all in the dairy industry believe them!



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England V Estonia Football Tickets – 8th September 2015 – 19:45 pm    (16th June 2015)

If anyone is interested in 2, 3 or 4 tickets in any section of Wembley, please email lydia@ipaquotas.co.uk as soon as possible.


0.75ppl milk price reduction for suppliers to Glanbia Cheese – from 1st July  (5th June 2015)

This takes producers standard litre price to 23.94ppl


0.5ppl milk price reduction for suppliers to Woodcocks Dairy - from July 1st (5th June 2015)

This takes producers standard litre price to 24.5ppl


Dairy Crest hold milk prices for July  (5th June 2015)

Dairy Crest has joined Muller in announcing to hold farm gate milk prices until at least August 1st.


Spot Prices back down to 12ppl – Need we say anymore? (5th June 2015)


GDT falls for the 6th consecutive time both the number of registered and successful bidders fell to those recorded two weeks earlier  (5th June 2015)


Further grim news from this week’s GDT auction with the overall average falling 4.3% to average $2412 with virtually all products recording falls.


Butter was hit hardest falling 10% and its auction value has plummeted by 32% in just three months.



Notable prices were:

Butter                     down     10%      to average         $2619/t

WMP                      down     3.1%     to average         $2309/t – 7th consecutive fall

SMP                       down     1.3%     to average         $1982/t

Arla Westbury         down     2.8%     to average         $1915/t

Cheddar      up         11.3%   to average         $3055/t


Caffe Nero – The Villains or The Victims  (5th June 2015)

One of the main talking points at the excellent Cornwall Show was, inevitably, Caffe Nero allegedly banning milk from coming from the two badger cull areas. It’s fair to say that farmers are seething about this, and so too was I. Note the word was. The past tense. That’s until I had spoken to Nero at length and in-depth and thought a bit more about what it has done. My views will be diametrically opposed to most farmers, but there’s a lynch mob out there, right now. Some in the Dairy Industry refer to me as a leader (!)  If that’s the case I contest that few if any leaders would follow or condone a lynch mob. I hope what I have to say now tempers some of the industry’s (entirely understandable) vitriol against the company.

First, yes, the chain seems to have panicked in making its decision. But I genuinely believe that it had received credible, malicious and very nasty threats to its staff. And remember many (most in fact) of its public-facing staff are young and female. 80% of its staff are aged between 18 and 30, in fact. They are wholly untrained in dealing with nasty, malicious people hell bent on being as unpleasant and intimidating as they can be. Why should they be trained in that? Or put in that position? I have a daughter aged 23 and I wouldn’t want her to face such a frightening scene. Having said that she works in the office with me and she would say that’s frightening and scary.  Many farmers will have daughters and sons of the same or similar age to those working in Nero, and who are starting out in perhaps their first job. I am sure they share my view. Some of the small shops in London have as few as two people working in them.  So that’s two youngish girls potentially under threat. For that reason I can wholly empathise as to why Nero wanted to, in fact had to put their staff first on this issue. I know the same applies to farmers too. They should not be threatened either, but that is the nature of the people we are dealing with.

Nero were a soft target for the food terrorists who embarked on a nasty social media campaign which included sending at least one threatening email direct to one of its Senior people aimed at him and his family. In addition the terrorists posted up a map of the route of a planned austerity march on June 20th which marked every Nero coffee store on it. Note Nero have 100 London stores.

Second, Nero has had a thorough thumping from farmers, journalist and commentators. But Nero are not the Villains or the enemy. The enemy are the same bast-rds that intimidate the farmers in the cull zones. We are on the same side as Nero. As an industry we should be standing by our customers in such times, not condemning them and fighting among ourselves. We have to throw a protective, unified arm around them and send out the message that the antis won’t divide and rule us. Unless we do this then it will be another company next, and then another one after that.

Despite press claims to the contrary having spoken to Nero on several occasions at Board level I can confirm the Police are heavily involved and have taken the threats very seriously. Nero have not actually refused to apologise to dairy farmers but they simply can’t at the moment under these circumstances.

Third, every hour that passes when farmers are screaming at Nero is another hour where the antis are laughing at our expense, and rejoicing in all the publicity they have generated, and that we continue to generate on their behalf. They secured an early PR victory, but we are helping to drag it out. It has to stop.

Nero doesn’t have a position for or against the badger cull which they say is a matter for the Government to deal with. However they certainly have the utmost sympathy for dairy farmers who are caught up in this situation. They do have a duty of care to protect their staff and customers from the threats of violence, intimidation and business disruption.

With hindsight Nero could certainly have handled the situation different and better but at the end of the day they simply sell coffee and from my conversations with them Nero plan to continue to use British milk from British dairy farmers and have no appetite to take a position on the badger cull.

In my opinion the time for giving Nero a thump is over. It is now time to hold out the hand of co-operation and to start helping it to get back to where it was, and to send a message out that the industry will help and support other customers faced with similar intimidation. Its Nero today and you can be sure other targets will already be on the terrorists’ radar. Its time to stand united.

First Milk’s Chairman Sir Jim Paice's £90k salary is slammed by politicians  (5th June 2015)

The Scottish Rural Affairs Committee enquiry singled out First Milk’s Sir Jim Paice's salary of £90,000 a year for 50 days work for some robust scrutiny.


MSP asked whether the payment of £1800 a day was fair remuneration given the difficulties faced by the farmer members of the troubled co-op.


Sir Jim’s response was “I'm not going to deny that I'm being paid very reasonably for it, but that's not the primary objective"


There was also criticism of the fact the salaries of the rest of the board are "shrouded under secrecy".


That's surprising because if it's true then clearly some of the members presumably feel the salary they receive is unjustified.


One thing is for certain if the ongoing independent report into the governance of First Milk is as hard hitting as it should be a number of its board will surely be replaced this year with better qualified professional members who can help the new CEO as opposed to what some have called enthusiastic members.


Arla UK TV campaign promotes dairy farming and ownership  (5th June 2015)

This Monday, during the Coronation Street adverts, Arla will have the first showing of its new advert, which focuses on both Arla’s range of dairy products and the fact the co-op is owned by its farmer members.


The advert is eye catching to both farmers and families and follows Arla farmer, Joe Delves, during his morning with the cows whilst the rest of the world is waking up.


The best cheddar cheese is Belton’s Traditional Organic  (5th June 2015)

Farmhouse cheesemakers Belton Cheese were crowned Best Cheddar Cheese with its Traditional Organic Cheddar at the British Cheese Awards. Belton Cheese went on to win 17 awards in total.  With 177 cheesemakers and more than 1000 cheeses competing, the competition was tough.


Scottish farmers to share £12.2m of CAP refund  (5th June 2015)

Around 14,600 Scottish farmers will receive a share of £12.2m into their bank accounts next week, which is basically a refund of the unspent CAP financial discipline fund for 2013 SFP payments.


The average farmer payout is expected to be just under £850 per farmer.


At 39p for two litres we thought we had found Britain’s cheapest milk but ……  (5th June 2015)

Yes, last Friday Paynes Dairies supplied milk at 79p for 3 litres was very quickly ousted for the number one spot as Britain’s cheapest milk.  In fact, it lasted 3 minutes at the number one spot until pictures cam through showing 2 litres of both Country Life milk and 2 litres of Muller Wiseman branded milk for 39p.


Then along came 2 litres of Goodness from Eden Milk supplied by Wells Dairies for 35ppl.  Yes, sold at 17.5ppl.  Clear evidence that all hell has broken out again in the Midlands with, one would assume, processors simply battling on price to gain a shilling on milk rather than balance it into commodities.


Thanks to the eagle-eyed readers who sent us the evidence of the deals.  I hope no one can top trip this latest deal.


0.84ppl (1 Euro Cent) milk price reduction for Arla members it could have been worse<