Dairy Industry news and features

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Our Weekly News Bulletin is available by email. To receive it please email sales@ipaquotas.co.uk

0.25ppl Milk price increase for all First Milk suppliers (3^rd September 2010)

With the exception of those who are under notice to leave. Interesting to note the Co-op has been keen to point out this increase has not come from the marketplace but from cost cutting. This takes their milkprices.com standard litre price to 23.63ppl (liquid), 23.27ppl (cheese & balancing).

Auction prices surge almost 16% in the month (3^rd September 2010)

Encouraging news from Fonterras monthly milk auction as prices increased by 15.7% compared to a month earlier. The average price paid on Wednesday by the 75 successful bidders was $3,562 compared to $3,080 in August up 15.7% (+$482). The largest increase was seen for WMP where prices increased by 18.5% (+$548) from $2,974 to $3,522/tonne.

The frequency of the auctions now doubles to twice monthly with the next auction on September 15^th.

Arlas profits very healthy (3^rd September 2010)

Arlas Danish and Swedish farmer owners will be very pleased with its half year results which show a £81.2m profit (697 million DKK). They put this down to a combination of rising global commodity prices, exchange rates and cost cutting.

Consequently Arla has revised its predicted profit for the year from £110.7m (950m DKK) to £140m (1.2 billion DKK).

It’s a great pity Arla fails to breakdown the numbers to show earnings from its UK arm.

Rumours of imminent new Partner in Westbury Dairies balancing factory. (3^rd September 2010)

If the DFOB receiver Stephen Oldfield  plays his part in releasing the relevant paperwork attaching to DFOB's former share of the Westbury venture.

it should  shortly  result in the announcement of a new third  partner to join Milk Link and First Milk which will hopefully bring new ideas and  further boost the plants output and profit. Currently First Milk hold two thirds of the shares in the venture and Milk Link hold one third. Watch this space for further news.

£1million Co-op cheese marketing campaign (3^rd September 2010)

First Milk has allocated £1million to fund a 3 year marketing campaign to promote its Lake District Cheese Co brand which is currently worth £26million per annum in retail sales.

The Lake District Cheese Co has national listings with all major retailers and the aim is to propel the brand in to the UK’s top 3 cheddar brands within the 3 year marketing period.

Potential Early Christmas present (3^rd September 2010)

Next weeks NEC Dairy & Livestock Event will see the launch of Industry Character Roger Evans second book "Over the Farmer’s Gate" which follows on from his first sell out book "Good Evans" Ian is not convinced Roger has what the publishers describe as a "cult following" unless that refers to The Welsh

TAFIA !

The book will be launched on The Cow Management Stand (BM-243) and Roger will be on the stand signing books at 10.30am,12.30am and 4pm on both days at a discounted price of £10 a copy compared to the shop price of £12. It might be early to be thinking about Christmas presents but this is sure to be a popular stocking filler with most Dairy Farmers.

Also available from the publishers www.merlinunwin.co.uk

John Alvis is new RABDF President (3^rd September 2010)

Popular farmhouse cheesemaker John Alvis of Alvis Bros near Bristol will be the next RABDF President.

Ian’s Diary

5.45am Monday 6^th September – Radio 4 Farming Today interview involving Ian and a Cumbrian Milk Link producer.

12 noon Monday 6^th September – Panel member on a session “What the papers say” at the Dairy UK conference “Meeting the challenges” at the Hilton Hotel near the NEC. Ian will join Suzanne Christiansen, (Dairy Industries International), Julia Glotz, (The Grocer) and Alistair Driver, (Farmers Guardian).

8.15am Tuesday 7^th and Wednesday 8^th September - Panel member for the Barclays Bank Breakfast Question Time on their Stand at the Dairy Event.

2pm Tuesday 7^th and Wednesday 8^th September – Panel speaker on Dairy Farmer magzines Speakers Corner Milk Debate along with Jonathan Ovens and Terry Ziton (Medina) (Tuesday only).

0.25ppl Milk price increase for all First Milk suppliers - (August 2010)

With the exception of those who are under notice to leave. Interesting to note the Co-op has been keen to point out this increase has not come from the marketplace but from cost cutting.

£1million Co-op cheese marketing campaign (August 2010)

First Milk has allocated £1million to fund a 3 year marketing campaign to promote its Lake District Cheese Co brand which is currently worth £26million per annum in retail sales.

The Lake District Cheese Co has national listings with all major retailers and the aim is to propel the brand in to the UK’s top 3 cheddar brands within the 3 year marketing period.

1ppl milk price increase for Barbers Cheese suppliers – from 1^st September. (27^th August 2010)

0.7ppl milk price increase for Belton Cheese suppliers – (27^th August 2010) from 1^st September. This is Belton’s fourth price increase this year, with a total 2010 increase of 2.1ppl. Their standard litre price will move up to 24.35ppl and their manufacturing standard litre moves to 25.63ppl (Source = milkprices.com)

Auction results dip further (27^th August 2010)

Thursday’s UDF Northern Ireland monthly milk auction results saw prices down 2.7% (0.66ppl) to average 24.14ppl (July average 24.8ppl) for the 41 million litres on offer (July 45 million). Twelve months earlier the auction averaged 21.54ppl. This is the third consecutive month prices have eased from their May peak of 26.53ppl.

United’s CEO David Dobbin commented “This was a good result for our farmers with the auction price holding up despite a collective fall of around 25% in the Fonterra auction price in recent months.”

United Milk’s producer price less but still healthy (27^th August 2010)

United Dairy Farmers’ base milk price for July milk deliveries was 24.5pp, which, whilst 1ppl down on the June 25.5ppl price is still a base milk price some mainland farmers wish they had achieved.

Swift response to Arla’s proposed £70 million interest free loan proposal (27^th August 2010)

Last week’s news that Arla and The Board of AFMP are proposing producers pay a further 4ppl compulsory levy starting in January 2011, for which no dividend or interest payment will be made, has prompted an angry response from a handful of producers and even spurred Dairy Crest to pen to paper.

Arthur Reeves, External Affairs Director of Dairy Crest, issued a statement confirming the company has “no plans to follow Arla in making compulsory deductions from its milk suppliers” with identical noises coming from the UK’s other major player, Wisemans.

Both recognise their producers find it tough enough to invest in their own dairy businesses without having a compulsory interest free loan imposed on them.

The reaction of Arla producers will be the source of many column inches during the September meetings as they weigh up whether £50,000 for every 1 million litres of milk delivered is best handed over to Arla or needed as money to invest in their own units.

More cheap milk (27^th August 2010)

Farmfoods are promoting 4 litres of fresh milk (ex-Wisemans) for £1.50 or 37.5ppl. Let us know if you spot similar promotions?

Now 300 cows is too large (27^th August 2010)

A Compassion in World Farming (CIWF) spokesman, Stuart Notholt, has this week commented “It looks like the cows will be kept in groups of 300 or more. This is far too large for a proper social unit.” This was in opposition to a 1,000 cow unit in Wales. It would be interesting to know what size is considered by CIWF as a proper social group.

Women’s Institute returns with another dairy farmer initiative (27^th August 2010)

Any retailer would be lying if they said the threat of another Great Milk Debate organised by The National Federation of Women’s Institutes is not the one thing which sends shivers down their spines. Well another is back on the radar and if conducted as well as the 2007 one, it is sure to deliver results and positive changes.

A press release announcing the Debate from the NFU sees President Peter Kendall accuse supermarkets of bully-boy tactics. Clearly someone has wound him up to the point this has become a presidential issue completely by passing his dairy board, which has not gone unnoticed.

We are not sure Mr Tesco will take too kindly to the badge of bully-boy with reference to their dedicated liquid arrangements, which are sure to see a 1^st October Tesco price increase, which given the choice they would like to swerve!

1ppl milk price increase for Barbers Farmhouse Cheese suppliers – From 1^st September 2010. This takes their total 2010 farm gate milk price rise to 2ppl. New standard litre price 25.14ppl (milkprices.com) (20^th August 2010)

0.5ppl milk price increase from Heler's Cheese – From 1^st September 2010. This takes the cheese makers total increase for this calendar year to 2.1ppl and will make their standard litre price 23.9ppl. (20^th August 2010)

The world’s biggest 1 billion litre dairy becomes reality (20^th August 2010)

O ye of little faith, goes the saying and that was certainly Ian’s initial view on Arla’s proposed London super dairy project.

Well, construction of the world’s largest liquid dairy is rapidly changing from fairytale to reality with news that the agreed site could be signed up and announced within days.

Plans to build the 1 billion litre super dairy were first announced in November 2009 (on the same day First Milk sold 37% of its stake in Wisemans) with the aim to be open by Autumn of 2012 and today Arla have confirmed this is the target and have even penciled in a date for the official opening.

The initial cost will be £150 million and when it is at full capacity it will process 20% of GB liquid milk.

As we stated at the time the announcement will cause much head scratching in Dairy Crest HQ and numerous middle ground processing offices knowing that this signals the undisputable fact that Arla and Wiseman are the only two current processors who are certain to be around in 2012 with other plc, co-op and private processors set for numerous mergers and takeovers, whether they like it or not. 

The new dairy is sure to have knock-on implications for Arla’s existing processing facilities at Ashby, Oakthorpe and Hatfield Peverel, where closures and job losses are likely to be the order of the day as well as serious effects likely to be felt by Arla’s competitors.

Arla producers to help fund new super dairy (20^th August 2010)

Plans unveiled on Thursday confirm Arla’s current producers will be consulted over a proposal to contribute £70 million to the £150 million plan through the investment arm MPL but only to invest in the UK factory.

Currently all producers invest up to 1ppl and this will be increased from 1^st January 2011 to a maximum 5ppl which will be deducted from producers’ milk cheques over the next eight years at a rate of 0.5ppl per annum to give an additional contribution of 4ppl in total. At that stage a 1 million litre producer will have an investment of £50,000

Whilst the money to build the new dairy will all be required in 2011 and 2012 there is no requirement for MPL/producers to put the whole £70 million up front, there by incurring arrangement fees and interest.  In the event the Arla milk price takes a temporary tumble MPL, at their discretion, have the option to elect for a 3 month holiday from paying the contributions.  Arla have no plans to pay producers a processing or interest dividend on the investment with any return coming back to producers in their milk price.

The move is sure to spur even the sleepiest Arla supplier to attend one of the various producer meetings scheduled for September, where lots of questions will hopefully be answered.

Any producers who cease milking or change milk purchaser will continue to be repaid any capital contribution in years 3, 4 and 5, together with any appreciation in their share value.

Muller deductions should be scrutinised (20^th August 2010)

During the past month we have received several e-mails from disgruntled Muller suppliers who claimed surplus milk supplied by farmers in June was paid at a realisation price of a pitiful 16ppl as a result of a 10ppl deduction. This comes at a time when spot milk was selling for between 23.5ppl to 24.5ppl.

Basically, the 10p penalty was applied to any suppliers who delivered more than 10% additional milk to that supplied in June 2009. However, the farmer suppliers understanding was that they would be paid a realisation price.

Solution – The farmer representatives need to check what Muller realised from the sales of the surplus milk by requesting honest open book accounting from the yoghurt maker.

First Milk’s annual results (20^th August 2010)

First Milk’s eagerly awaited end of year results have been released 5 weeks ahead of their very disappointing 2009 results.

This year’s headlines are that there has been a “marked improvement in the financial performance” of the co-op compared to its 2009 results including.

1. A £10.3m positive swing in pre-tax profit compared to last year with the 2009/2010 numbers showing a £400,000 profit.
2. Group turnover down 8% to £536m.
3. Net bank debt reduced by £10.7m to £69m.
4. Only 95 members who have resignations to leave the co-op during the next 12 months have confirmed they have a new milk buyer to move to.

First Milk’s annual results – Potters View (20^th August 2010)

Ian is like a hamster on a wheel when it comes to the dairy industry end of year results and he is always keen to ensure the shiny outer skins of the apples are carefully peeled back to check for any rotten or unpalatable bits.

So to First Milk’s 38 page financial statement, what did Ian find?

a) The operating profit is considered by most a key barometer to how a business is performing and First Milk’s operating loss was £4.4m compared to £4.995m in 2009, which is slight improvement.

b) Without the sale of 4 million Wiseman shares, which netted £18.578m back in November 2009, together with around £1.5m received in Wiseman share dividends, these accounts would be difficult to dress up. This share sale generated a healthy £7.9m profit for the co-op and whilst the sale reduced debt and gave them more flexibility the reality is the £18.6m from the Wiseman share sale is the only way they could have reduced bank borrowing.

Bottom line is any cash generated has been primarily as a result of the sale of the shares, which if they hadn’t sold they would have paid out more interest charges to the bank and would have comfortably wiped out any profit and any claim of a £10.3m positive swing headline.

c) The accounts show a £8.9m pension scheme loss in 2 years, which highlights how susceptible their accounts (and others) are to wide swings in pension valuations. Also note in 2007 and 2008 First Milk’s accounts showed a £6.9m gain in pension. Farmer members are funding these pension costs.

d) Whilst their 31^st March balance sheet shows a total capital and reserves figure of £45.644m this figure should, in Ian’s opinion, be adjusted as follows:

£45,644             First Milk total capital and reserves figure

Less  £43,801 Member loan capital because this is money the co-op owes to members

£1.843m            Nett asset value

Plus £18,978 Uplift due to increase in remaining Wiseman share value

£20.821m          As a real tangible asset value

e) The accounts split down the profitability, or lack of it, for the co-op’s 3 divisions liquid, cheese and ingredients. Big question which needs to be addressed is in connection with its liquids sector losing £2.82m. It is understood around 2/3rds of the co-op’s milk is sold as liquid with large chunks sold to Wiseman, Nestle and Dairy Crest.

Wiseman have publically stated a formula as to how they pay the co-op for liquid they purchase (30% of all First Milk’s liquid sales) and its hard to believe these sales do not deliver a healthy profit to the co-op, especially now Mustoe has had his surgical knife out.

Accepting this it leaves two options:

1) First Milk’s costs (or were in that year) out of control, draining the profits.

2) Dairy Crest, Nestle or others buying liquid milk from the co-op are having it on the cheap.

It could be either of these or a combination but one thing is certain Mustoe and Allum cannot allow either to continue and must make changes to reverse this trend.

f) Severance pay is a favourite topic of dairy farmers, mainly because they work many hours for little reward and respect and then pick up a set of accounts to find they have paid 1½  times annual salary to ousted finance director (Jim McGuire) who picked up a tasty  £375,000. Then comes their former Chairman Richard Greenhalgh with a £120,000 and former CEO Peter Humphries £430,000 payoff. This all clocks up to almost £1million in severance pay and whilst 18 month notice contracts should never have been put in place it must surely be a case of cut once and cut deep and the belief your first loss is your best loss. Mustoe has to crack a lot of eggs to make this omelette and to be fair on executive pay the easy option would have been to leave terms as they were rather than take the brave step to cut the notice period for all executives to a maximum 6 month period – which affects his new CEO Kate Allum.

g) Staff numbers at the co-op have been cut from 732 to 615 in 12 months, which is another big 16% reduction.

Summary

First Milk should not be compared to DFB because they do have a stronger balance sheet and should once again be credited for producing reasonably honest accounts with minimal spin.

However, their supplying farmers are not really in a better position than they were 12 months ago and are still hammered on milk price but the co-op itself is in a better position.

However, Mustoe has only influenced 5 months of the latest accounts and the real test will be in 12 months time. The move to produce half year trading performance figures must be viewed as a signal of how confident the co-op is that the figures for the first half of 2010 will as a minimum show satisfactory performance of the business. This is a very positive and welcome move. Let’s hope Mustoe has got rid of some of the problems he inherited, especially any costs which were draining the profits of the co-op and its members milk price.

Ian’s prediction is next year’s results and farmer milk price will be a different ball game as Mustoe and Allum deliver more change and shake the co-op from its roots. I believe their low point was 2008/2009. Their goal is one day to run alongside Milk Link and/or to take their members to a better place. Once this goal is achieved the turnaround task will be complete. Watch this space!

Campaign groups attempt to recruit dairy farmers (20^th August 2010)

The list of anti-big dairy unit groups is endless, including Friends of the Earth, CPRE, RSPCA, The World Society for the Protection of Animals (WASPA), Compassion in World Farming.

Their main focus is drumming up support to oppose plans for the 8,100 Nocton dairy scheme and in all cases it’s not clear whether it’s the size which concerns them, the fact they are housed or in some cases whether it’s both. Now some of these groups are attempting to set farmer against farmer using sensational phrases like “we need to show what might be lost forever if these factory dairies become the way our milk is produced.” If you are approached to be interviewed or for a photo session, take some good advice and walk away from the invitation. This is not an opportunity for farmer v farmer, organic v zero grazed or Friesian v Holstein.

Dairy Crest price up 8p gallon (20^th August 2010)

Dairy Crest have increased the price it charges to all its bottled milk buyers by 8p/gallon from the 29^th August, this follows a 6p/gallon rise in April, making a total increase of 14p in 5 months (3ppl).

Britain’s cheapest milk (20^th August 2010)

At less than 13p/pint or 22ppl retail, Morrisons are now selling Morrisons’ 1% fat for 50p for 2.272 litres or 4 pints, which is the cheapest milk in town. Morrisons buy their milk from Dairy Crest and Arla.

0.4ppl liquid milk price increase for Charlie Payne Suppliers – backdated to August 1^st. (13^th August 2010)

Takes their standard litre price to 24.6ppl (Source milkprices.com)

2ppl price rise on Tesco contract on the cards (13^th August 2010)

Farmer representatives from Arla and Wisemans will have to be very clued up and vigilant when Promar crunch the numbers which determine the cost of production element of the Tesco 6 month milk price formula next month. According to DIN increases in feed costs and oil are likely to result in approaching a 2ppl rise and that’s before this weeks rise in commodity prices (see next story).

45,000 tonnes of futures traded in 1 day! (13^th August 2010)

Meanwhile BOCM Pauls report figures released by the US yesterday for lower grain, oilseed, and soya bean stocks resulted in 45,000 futures contracts changing hands involving a staggering 6m tonnes. It’s looking like a very expensive winter.

Northern Ireland milk prices ‘disconnect’ from lagging GB prices (extract from DIN) (13^th August 2010)

The average UK farmgate milk price in June was 23.87ppl, according to provisional data from Defra, an increase of 1.37p (+6.1%) on the year before. But while the average price in GB was up only 1.1% to 23.63p, the average in Northern Ireland was up 42.3% to 25.19p, where prices are directly connected to commodity prices as reflected at United Dairy Farmers monthly milk auction. Despite fast-rising dairy commodity prices across Europe in the first half of 2010, UK farmgate milk prices for the first half of the year were up only 0.8% to 24.0ppl and there was a stark contrast between GB and Northern Ireland: prices for the first half in GB were down 3.7% to an average of 23.91p while prices were up 37.2% in NI to 24.43p. Prices in NI were 6.8% higher than in GB in May/June, the first such big disparity since the 2007 markets boom when the annual average milk price in NI was 6.4% higher than in GB at 21.78p.

Correct June production figure (13^th August 2010)

The correct provisional production for June (see story below) is 1.179 billion litres which takes cumulative production for the first four months of the year to 4.695 billion litres, (not butterfat adjusted). This is an increase of 118.4 litres (+2.6%) on the same 4 month period a year ago (not butterfat adjusted). According to DairyCo Datum UK daily deliveries are running 1.4m litres (4.1%) a day ahead of last year.

Butterfat for July stood at 3.82% (2009 – 3.83%) and cumulative butterfat for the first 4 months stands 0.6 points below the 2009 figure (3.90%) at 3.84%.

Don’t panic over 70% RPA production figure error (13^th August 2010)

The first and indeed the second production figures released by the RPA this week showed June production so far wrong they certainly passed the elephant test even if the RPA analysts did not spot it.

The RPA’s first attempt showed June production at 1.989 billion litres instead of around 1.178 billion representing a 70% error and their cumulative position showed the UK had produced a whopping 5.505 billion litres in the first 4 months (+20% on the 4.577 billion 2009 figure) compared to our estimate of 4.694 billion.

We posted the story on our website on Monday 9^th August and clearly stated that June 2010 production was, in our opinion around 1.178billion litres. The RPA duly amended the figure the following day but still managed to put a wrong figure down of 1.379billion litres.

Third time lucky and by Thursday the figure inserted was 1.179billion which is just 1 million litres from our estimate. Unbelievable but true.

First Milk end of year results - Due to be published on Monday followed by Ians take and summary later next week. (13^th August 2010)

Dairy farm supplies business is a tough market (13^th August 2010)

Hadrian Farm Services who are the largest specialist supplier and installer of dairy equipment in the North of England covering a huge area stretching across Northumberland, Durham, Yorkshire, Cumbria, Lancashire and South Scotland have today confirmed that they have entered in to a voluntary arrangement with creditors in addition they have also confirmed the new arrangements will not affect any customers, equipment sales etc.

This will be a comfort to those dairy farmers who have already paid Hadrians a deposit for new Fullwood milking equipment for whom the company are main agents.

Government U turn on plans to scrap school milk (13^th August 2010)

David Cameron was quick to flex his muscles on his Education Minister David Willetts with Cameron axing plans to scrap free school milk for nursery school children under 5’s which would have saved the government £50m a year.

One theory is that Mr Cameron was fearful of a new nickname similar to the milk snatcher one Margaret Thatcher claimed when she controversially scrapped free school milk for over 7’s in the early 70’s.

World commodity auction prices drop a further 8.3% (6^th August 2010)

This week’s Fonterra auction saw prices drop a further 8.3%, which means prices have dropped almost 23% in the space of only 3 months.

This month’s all products average was $3080, which is still 34% higher than 12 months earlier ($2301). The auction involved 127 bidders of which 111 were successful.

1ppl price rise for Wyke Farm Cheese suppliers – From 1^st September - Total price rises from Wyke in 2010 amount to 1.75ppl.   Their new standard litre price is just short of 25ppl at 24.95ppl and their manufacturing standard litre price rises to 26.52ppl (milkprices.com)  (6^th August 2010)

0.65ppl First Milk price increase – From 1^st August for its cheese contract supplying farmers, including Highlands & Islands producers. (6^th August 2010)

0.40ppl First Milk price increase – From 1^st August for its balancing pool supplying farmers. As anticipated First Milk, along with most of the industry, have been unable to return extra money to their liquid suppliers. (6^th August 2010)

0.3ppl Grahams Dairy milk price increase – From 1^st August – a very lonely liquid milk price increase. (6^th August 2010)

First Milk resigners unhappy that no further increases will come their way (6^th August 2010)

The Board of First Milk having approved the two increases followed with a decision that future price increases for all First Milk producers will only be  passed on  to producers who have not  tendered   their resignation. Certainly the hope from First Milks non resigning members is that there will be further price increases across all contracts in 2010.

The last time a similar move was made by a UK processor was in July 2007 when DFB decided a 0.2ppl contract premium was to be added to a 0.5ppl increase however the premium was not available to those DFB farmers who were under notice to leave.

At the time DFB were advised not to restrict the 0.5ppl price increase to those members who had not tendered their resignation hence they created the concept of a contract premium. The move was instantly viewed as a penalty on producers who had resigned having exercised their contractual right many of whom had 10’s of £1,000 invested in the Co-op. Several members took legal advice and threatened action whilst DFB maintained it was a “loyalty bonus”.

DFB made the move following a significant number of what they called “speculative notice resignations” in a bid to have them rescinded.

Meanwhile the large number of First Milk members whose resignation was tendered last autumn, following its disastrous end of year results and 0.65ppl milk price cut, will have to sweat it out until they change buyer on January 1^st. Several claim they are seeking legal advice and no doubt former First Milk Director Mansel Raymond has received a few calls from disgruntled NFU members seeking NFU support. Raymond is quoted as saying the move is “an utter disgrace” and, in true NFU style, points to “poor contracts” he also enquires “I wonder if these resigning members would also be excluded from any future price decreases as well?”

However, whilst there is no secret in the fact First Milk has a high number of resignations due to expire on 31^st December it cannot be fair or right that a number of these are known to be speculative. Perhaps Mansell is right, the contract is poor and should be beefed up but not only in the areas he now feels appropriate.

Milk and Meat from cloned cows (6^th August 2010) This week’s media has been dominated by a mischievous story, which originated in the USA and frankly was very poorly researched. An American journalist sneezes and everyone in the UK dairy industry catches a cold. The DairyCo issues management team have been on overtime defending the industry and making sure our domestic media work from a position of knowledge.

Bottom line is there are no cloned cows in the UK and no evidence milk from the offspring of cloned cows has entered the UK food chain, so those who would like to paint a sensational picture showing bottles of cloned milk on supermarket shelves are disappointed. No doubt the likes of The Daily Mail and other media ferrets will continue their hunt to identify and expose the farmer(s) involved.

Italian Job (6^th August 2010)

The Italian Parliament has voted in favour of a further 6 month delay for the recovery of super levy payments going back to 1995. This is against a threat of legal action by Brussels, which is long overdue. The problem was thought to have been resolved following a European Council decision in 2003, which sanctioned the Italian authorities to pay part of the super levy fines for the period 1995-2002 and to then recover the monies at a later date from milk suppliers but with no interest charge (source: DIN)

Letter to Ian from the heart of a farmer’s wife (6^th August 2010)

Ian receives numerous daily emails from bulletin readers, all of which make interesting reading and often good copy for the next issue, however, the letter below struck a cord and hence we are sharing it with readers ….. It comes from a farmer’s wife:

Dear Ian,

Milk buyers play a very dangerous game withholding money justly due to our dairy farmers. The consequences are obviously not of major concern to large profit driven businesses whose actions are slowly sapping the life out of the British dairy industry. 

With British industry in decline, the dairy industry survives because farming is a way of life. Despite extremely long unsocial hours with weather driven and often difficult working conditions, most dairy farmers are in it for the love of it rather than to make huge profits. This is taken advantage of by those in the milk chain who are far too greedy.

Dairy farming with its very high business turnover and many suppliers puts a lot of money into the UK economy, with recent years not showing sustainable returns from farm gate prices. Keeping your head above water while working at a loss, motivated by the constant promise of good times ahead can only last so long and is leading one by one to dairy farmers gradually sinking out of existence.

The increasing number of herd dispersal sale catalogues we receive, with many successful good quality and often long established herds ceasing production is a good measure. The recent acceleration in recorded numbers of farmers leaving milk production does not yet show the increasing numbers who continue milking but are gradually selling their cattle rather than suffering a final dispersal sale.  

The gross abuse of the imbalance of power in the milk supply chain allows those with control to keep money for themselves or their shareholders as they continue making disproportionate profits even in difficult economic times. A good income is also provided whether justifiable or not, for those funded within the supply chain who claim to represent the interests of dairy farmers.

The longer this injustice continues the more damage is done as money is diverted elsewhere, never to be returned to its rightful owners to enable them to repay ever accumulating debts. 

Profit driven businesses are not concerned about the future of the British dairy industry, or in the long-term interest of consumers or consumer choice. When it has gone they will simply find something else to make money from, which is why large successful retailers have fingers in so many pies.

I clearly recall that during the big freeze last Christmas a major concern of consumers was their supply of fresh milk and bread.

The loss of the British dairy industry would be a massive blow to consumers, our countryside and the rural economy, and with an increasing reliance on imported dairy products leading to the recent record rise in the dairy trade deficit, this would also have a significant effect on the UK economy.

Many consumers and politicians are blissfully unaware of the consequences of this very serious threat to the British dairy industry taking the cheap supply of fresh British milk for granted as this valuable staple food is regularly used as a loss leader to fuel retail price wars at the expense of others lower down the chain.

British milk is produced to high standards that do not come cheaply. This money is badly needed to help ensure a sustainable future for the British dairy industry and it must be passed on now, without delay and with arrears, otherwise this latest abuse of power will be yet another slap in the face for British dairy farmers.

Kathleen Calvert, Paythorne.

For sale - spring calvers - 15 heifers for sale for further details contact Charles on 07753418468. (6^th August 2010)

0.6ppl Joseph Heler price increase-from August 1^st (30^th July 2010)

This takes their 2010 increase to 1.6ppl and the word is they are already talking of a back to back September increase.

0.5ppl Milk Link price increase – from 1^st August (30^th July 2010)

The Co-op seems  to be leading the UK cheese industry in passing back increases to members with this its second consecutive monthly rise (July plus 0.75ppl). This takes the Milk Link manufacturing standard litre price to 25ppl and 25.22 for liquid. The Co op has increased its members milk price by 1.75ppl during 2010.

Clearly Milk Link are both cutting costs and negotiating price increases with both its retail and food service customers. However their success in passing more money to members is likely to be linked to selling its quality cheeses than in selling liquid milk to its regular liquid customers Wiseman and Arla.

With Milk Links standard litre price now at 25.22ppl for liquid it eclipses the three main liquid processors Wisemans 24.72ppl, Dairy Crest 24.26ppl and Arla 24.5ppl. There are some who say Milk Link had no need to pay out the 0.5ppl.

All eyes are now on the rest of the pack, particularly First Milk, to demonstrate how successful their negotiations have been the First Milk Board met this week and are certainly bullish and confident that the additional revenue earned from cheese and whey will translate to an increase in their cheese contracted farmer milk price and we hope this will be from August 1^st. However, they will certainly struggle to find any additional money for the liquid suppliers given their largest liquid customer is Wiseman and they also sell liquid to Arla and Dairy Crest.

0.5ppl South Caernarfon Creameries (SCC) milk price increase – from 1^st August (30^th July 2010)

Total increases passed to members amount to 2.6ppl in 2010. This takes their standard litre price to 23.61ppl (milkprices.com)

FFA and International Rescue return on August 1^st (30^th July 2010)

All has been eerily quiet over the lack of milk price movements in the four regions of the UK whilst in Europe the European Milk Board (EMB) have been very active. A partnership between FFA and EMB was always on the cards and the two are currently working very close finalising plans for a GB assault on both processors and retailers who are involved in an supporting discounts of milk and cheese rather than seeking price increases. EMB are working with David Handley with a view to offering support, backup and innovative ideas, particularly in liquid.

The frustration will come to a head post 1^st August for those who neglect to pass on to farmers a fair price increase. It will include a range of retailers, discounters ,processors  and middle ground bad guys. Others who would like to claim they are quietly negotiating price increases  stand accused and indeed guilty of talking about it believing this equates to doing something. David Handley and FFA have been in hibernation for a long time and this news will send shivers down the spine of  potential targets. 

This time a new Brains will be on board Thunderbird 5 working out advanced tactical movements. For further details keep an eye on www.farmersforaction.org

Liquid retailers will be the key targets (30^th July 2010)

Retailers are squeezing processors and by default farmers with their liquid milk promotions.

Asda seem to be leading the charge and on their website(click on http://your.asda.com/2010/7/22/moo-ving-down-prices-on-core-essentials ) this weeks headline is Moo-ving down prices on core essentials shows images and claiming a long term roll back on the cost of key essentials like milk as opposed to a short burst of activity. Asda slashed GB milk prices this week as follows: 4 pints down from £1.53 to £1.25

8 pints for £2

With similar offers in its Northern Ireland stores Asda claim “we’re lowering the price of milk, but we are not doing that at the expense of our dairy farmers”. Ian posted a comment on the Asda website concerning inaccurate statements made on the site by an Asda employee called Jo as to their 100% commitment to supporting the British Dairy Industry and the suggestion Asda can trace their milk from farm to store but the comment was lifted by the moderator.

Other retailers have immediately followed Asdas lead and claims that this will not affect farmers are rubbish. Other deals include: 3 litres 0.75% milk 75p Tesco

2 litres 1% milk 50p Tesco

8 pints or organic semiskimmed for £3 – Sainsburys and Asda

4 pints 1% milk 50p Morrisons

With none prepared to do anything about this worrying development all roads point once again to FFA and Handley to sort them out.

Dairy Crest Direct PR gaff (30^th July 2010)

There is a right time and a wrong time to feature good causes and in the opinion of some Dairy Crest Direct (DCD) members their decision to include a sensitive flyer for the ARC Addington fund with the latest DCD newsletter is a smack in the mouth for its hard pressed producers.

The ARC Addington fund is a farming help charity. The farmers who contacted us forcefully suggested the DCD board concentrate on negotiating a better milk price for members which will mean they have no requirement for the fund and perhaps could even make a donation.

Let’s hope the next edition of DCD news does not include a housing benefit form or a flyer for the Samaritans!

Board strengthening at SCC (30^th July 2010)

Bernard Harris, former successful CEO of Wynnstay Farmers Group, is to join the board of SCC from October which is certainly a positive addition to a board which currently has no non executive directors. Milkprices.com has been told the Co-op is “neither courting or being courted by another cheese processor with a view to a merger, takeover or acquisition” as we suggested in last weeks bulletin. All we will state is watch this space to see if this time round SCC do a deal or abort again. The pressure for something more to happen is still there.

Success at worlds largest cheese show (30^th July 2010)

The 114^th Nantwich show was held on Tuesday and is now the world’s largest cheese show with 300 cheese classes involving 3,230 cheeses and entries from 24 countries.

Shropshire farmhouse cheese makers Belton Cheese claimed 27 gold, silver and bronze medals together with 5 trophies including the one for the best outright English cheese.

The UK’s largest cheese producer Milk Link claimed 48 gold, silver and bronze medals. Its Red Leicester, made in Devon, scooped both the reserve supreme champion and UK supreme champion award, with its other cheeses collecting reserve UK champion cheese. Its’ certainly not mouse trap cheese coming out of their factories.

Truro cheese producers Lynher Dairies won the cheese lovers trophy with their Cornish Yarg.

Arla discontent will be shared on the golf course (30^th July 2010)

Rumors of a meeting in Derbyshire involving all 5 AFMP regional Chairman next week have been denied as simply a get together for a round of golf.

However the truth is the five wise men will be discussing what if anything they should do to make changes to the AFMP board which clearly they are unhappy with. There’s no real need for the cloak and daggers secrecy and denial if they feel changes are required they should be free to discuss the options. What they will require for an effective change is to replace any ousted board members with new directors who have the appropriate knowledge, skills, experience, independence, time and commitment and communication skills.

One candidate who is rumbled to be in the frame certainly appears to have the communication skills of Alf Garnett which perhaps would not be a wise move. Watch this space.

United Auction Results (23^rd July 2010)

Northern Ireland co-op, United Dairy Farmers saw 45 million litres sell at its July auction this week to average 24.80ppl for one month’s milk to be delivered in August.

This is a 0.58ppl decrease on the June 2010 auction (25.38ppl) and a 5.26ppl increase on the auction results seen in July 2009, which only averaged 19.54ppl.

0.5ppl milk price increase for members of United Dairy farmers co-op suppliers (23^rd July 2010)

June supplies by co-op members will see a 0.5ppl increase, taking their standard litre price to 25.84ppl (milkprices.com)

Co-op losses reversed (23^rd July 2010)

South Caernarfon Creameries co-op has recorded a £58,000 pre-tax profit having last year clocked up an eye-watering £1.08million loss.

Its operating profit in the year ended 3^rd April 2010 was £279,000 compared to a loss of £787,000 the previous year.

Its balance sheet shows cheese stocks at the year end had reduced by 30% to £6.7million.

As with all companies and co-ops which operated a defined benefit pension scheme the numbers show losses and holes which have to be plugged. SCC’s is a £255,000 loss which results in a 3^rd April 2010 total recognised loss of £213,000 compared to £934,000 a year earlier.

Director’s fees were up 16% and interest on member loans was a mere 0.5% amounting to £3,146 compared to a payout of £20,598 the year before. Share interest to members on share capital reduced by 86% from 78,263 (2009) to only £11,211 (2010). Supplying producers during the year totalled 149 and the 1998 website figure stating 200 producers supply milk to the co-op, as used by Ian in his recent Dairy Farmer article, has now been updated.

The word on the street is that SCC are courting (or being courted) by another cheese processor with a view to merger, takeover or acquisition. The SCC board having recently, failed to cement an attractive take over deal resulting in the resignation of two directors, means fingers will be crossed that the co-ops board make the right call this time. It’s a consolidation move, which needs to be right for members and right for the UK dairy industry even if it does not suit some SCC board directors’ agendas.

RPA and DEFRA both under attack for failure (23^rd July 2010)

First comes the news that UK taxpayers have to repay £161million to the European Commission as a result of its failure to correctly spend SFP money. The Commission has finally placed the blame at DEFRA’s back door for the errors.

Next came the release of the independent review of the RPA, where it is stated that the organisation is not fit for purpose to handle £2.3billion of public funds. Surprisingly, it does not recommend wholesale or change or scrapping of the Agency claiming such a move would not reduce the cost to the public purse. This is hard to believe!

The axe has fallen on the RPA’s CEO Tony Cooper who is yet another agricultural CEO to resign for personal reasons. But Cooper should not be the fall guy, the root cause of the RPA’s problems and the £161million cost to the taxpayer must surely be Margaret Beckett and the fact she was allowed to introduce such a barmy complicated scheme in England. The good news is that Jim Paice is almost certain to drive change in an attempt to avoid future fines and widespread criticism.

Milk Link and Cumbria Direct group abandon MCVE (23^rd July 2010)

The two have agreed to abandon the Milk for Cheese Value Equivalent (MCVE) formula calculation. The group was formed in 2007 whilst the Flying Dutchman, Ronald Akkerman, was in town.

For sale - 40 spring calvers including 15 heifers for further details contact Charles on 07753418468.

Ian’s Diary

23^rd, 24^th & 25^th July - visiting The CLA Game Fair, Alcester, Warwickshire

Positive view of world dairy prospects (16^th July 2010)

Henry Van Der Heyden, Fonterra Chairman, gave a very upbeat message to an industry gathering of the great and good from the UK dairy industry (plus Ian) last night, from the panoramic view of London on the 18^th floor of New Zealand House in the centre of London. Henry has been touring Europe and felt most Europeans were cautious over the short and medium term price trends for dairy products compared to his view, which was almost glowing in terms of future world demand and prices. He highlighted demand from China where Fonterra’s sales have tripled from 60,000 tonnes to 180,000 tonnes and rising.

Dairy futures trading update (16^th July 2010)

On Thursday Ian attended the first NYSE Liffe Seminar to learn how skimmed milk powder futures contracts will work when trading starts in the UK and Europe in September. It was a very interesting introduction to how trades will operate and Ian will cover the pro’s, cons and suspicions in his August Dairy Farmer article, which will focus on how Ian sees dairy farmers in the trading ring.

1,000 dairy farmers protest in Brussels (16^th July 2010)

EMB claim more than 1,000 producers from several member states joined their dairy farmer protest in Brussels on Monday aiming to influence discussions on reform of European Dairy Policy following the report from the Commissions High Level Group. To see the 14 photographs from the demonstrations visit www.europeanmilkboard.org and click on image gallery. Particularly note the bonfire of boots, clothes and liners!

Scottish dairy farmers continue to exit the industry (16^th July 2010)

Latest figures show the rate Scottish farmers are leaving the industry is increasing with the first 6 months of 2010 seeing 38 herds sold up compared to 41 in the whole of 2009.

Shropshire yoghurt battle (16^th July 2010)

Yoghurt maker NOM’s decision to build a new factory almost in Muller’s back garden has certainly added competition into the sector and the battle evidently continued at last Saturday’s Newport Show. Dairy farmers visiting the Muller stand were offered yoghurts to try and one to take away. The same farmers then visited the smaller NOM marquee where they were treated to a tray of the firm’s yoghurts. One reader described NOM’s move as “blowing Muller out of the water” and he is presumably still munching his way through the NOM treats.

GM crop cop out (16^th July 2010)

As we intimated in last week’s bulletin, the Commission are shamefully on the brink of absolving their responsibility for future decisions on whether to allow the cultivation of GM crops, deciding to nationalise the decision to individual member states.

The decision will mean member states can decide on a political as well as scientific basis whether to ban, restrict or permit GM crops in their country.

Such a move is a potential minefield, as highlighted by the Minister of Agriculture for Poland, who spoke on Polish radio commenting “I think the EC should take responsibility for the issue and state clearly that if we do not produce, then we should also not import GMO fodder”

He then went on to comment ““However, if a situation arises, whereby some European countries will allow GMO and others will not, then this competitiveness shall be decisively interrupted. That’s what I’m afraid of,” he warned.

Most of the farming papers have picked up on the topic today but the path appears to have already been concreted.

It will be interesting to see how our government deal with their new GM responsibility – let’s hope any decisions they take do not disadvantage our feed compounders and livestock industry.

Ian’s Diary

19^th & 20^th July - visiting The Royal Welsh Show

23^rd, 24^th & 25^th July - visiting The CLA Game Fair, Alcester, Warwickshire

1,000 Dairy farmers protest in Brussels (14^th July 2010)

More than 1,000 producers from several member states joined the European Milk Board protest (EMB) in Brussels on Monday aiming to influence discussions on reform of European Dairy Policy following the report from the Commissions High Level Group. To see the 14 photographs from the demonstrations visit www.europeanmilkboard.org and click on image gallery. Particularly note the bonfire of boots, clothes and liners.

0.8ppl milk price increase for Blackmore Vale suppliers – backdated to July 1^st (9^th July 2010)

0.4ppl milk price increase for Wiseman producers – backdated to 1^st July (9^th July 2010)

This takes their milkprices.com standard litre price for non-retailer aligned producers to 24.72ppl whilst their Sainsburys’ supplier’s price lifts to 26.82ppl. The increase puts Wiseman back in pole position as the table topping liquid dairy price.

0.42ppl milk price increase for Dairy Crest liquid suppliers – from 1^st August (9^th July 2010)

Hot on the heels of the Wiseman milk price increase comes a marginally higher increase announcement from Dairy Crest for its liquid suppliers. Whilst the 0.42ppl increase is welcome it will no doubt be a disappointment to DC’s liquid suppliers that the increase has been deferred until August 1^st boosting DC’s coffers rather than its producers.

The encouraging news is that in its press release DC’s Milk Procurement Director, Mark Taylor, has stated that DC has limited exposure to the recent volatility in the commodity sector. Therefore, with clear signs that commodity prices are easing such falls should not affect DC’s future milk price. This latest increase takes the Dairy Crest standard litre price to 24.26ppl, however, when you add in the Morrisons 0.4ppl premium it bulks up to a healthier 24.66ppl (milkprices.com)

Meanwhile, Dairy Crest’s Sainsburys suppliers’ standard litre price nudges up to 26.36ppl. Note, Arla’s standard litre price currently stands at 24.50ppl and with the 0.25ppl Morrisons premium share out lifts to 24.75ppl.

World commodity auction prices dip by almost 14% (9^th July 2010)

Wednesday’s monthly Fonterra Commodity Auction resulted in a significant 13.8% drop in the average price achieved compared to one month earlier. This months average was $3344 compared to $3880 in May, however, this is still a whopping 77% up on the prices achieved 12 months ago which averaged a very low $1886. The encouraging news is that 111 individual companies out of 115 who participated were successful, which is an auctioneers dream to have so many participants worldwide.

The results follow a 4.3% (1.15ppl) drop in last months United Dairy Farmers auction and confirms prices have boiled over.

June Milk Production (9^th July 2010)

UK milk production for June was 1,178.1m litres non butterfat adjusted, which is 48.6m litres up on June last year. Butterfat was down by 2 points at 3.76%. Cumulatively the UK has produced 3,553.2m litres non adjusted 77.2m litres up on the same period in 2009. Cumulative butterfat currently stands at 3.83%.

The reigns pass from one wise man to another (9^th July 2010)

This week was yet another milestone in the extraordinary story of the Wiseman family, and no doubt an emotional one, as older brother Alan handed over the reigns to his sparky brother Robert, who took on the role of Executive Chairman at the company’s AGM on Thursday.

The two have worked together very closely for the past 40 years or so and no-one could dispute the fact Robert inherits the chairmanship of a very successful and robust business.

Their fascinating family story is sure to be put on record in a book one day, having started in 1947, floated in 1994 and acquired 50 businesses in the past 35 years. Robert stated at Thursday’s AGM “It has been a remarkable journey and one that is by no means finished.”

Wisemans are certainly healthy and tough competition in their field and most, if not all, in the industry admire and respect them perhaps with the exception of ex-DFB Council chairman Stephen Yates, who has yet to relay to Robert face to face his critical comments on how they operate.

At the same time as Alan stood down from the Wiseman board, so did Andrew Dare (formerly Milk Marque Chief Executive). There’s a name you rarely hear of now but is another Ian would like to interview one day to hear his experiences and take on the UK dairy industry as one of the few people to experience both co-op and plc operating standards and methods. One for the future.

Farmer demonstrations – 12^th July 2010 (9^th July 2010)

EMB (European Milk Board), which represents more than 100,000 milk producers, is one of the organisations at the centre of plans for demonstrations in Brussels this Monday. The demonstrations aim to highlight the plight of dairy farmers across the EU on the day EU farm minister’s debate plans for reform of the EU dairy sector. Farmers will be demonstrating against the recommendations of the Commission’s High Level Group. EMB believe if the current reforms are implemented “milk producers will become prisoners of the dairies”. Plans are in hand to burn work clothes and boots to highlight the fact both livelihoods and dairy farmers’ existence are at stake.

Today EMB has presented EC Agriculture Commissioner, Dacian Ciolos, a draft plan for milk producers to be allowed to collaborate under a block exemption arrangement, which would mean milk producers would be exempt from European Competition Law. If this were to be successful it would certainly be a pivotal moment. It is, however, difficult to see how such a move could be sanctioned.

Commodity prices surge (9^th July 2010)

BOCM Pauls report solid gains in agricultural commodity prices (see above table) with Chicago soya futures seeing one fund buying a staggering 1 million tonnes on Wednesday. In addition they report an influx of new hedge fund money investment into wheat and soya futures since Wednesday with exceptionally large volumes traded.

GM crop decision is likely to be headline news (9^th July 2010)

Wednesday 13^th July is set to be a pivotal date in the history of the CAP when the likelihood is future decisions on the growing of GM crops will effectively be re-nationalised.

If the commission proceed as anticipated it will allow individual member states to restrict, prohibit or impede the growing of GM crops on any grounds and not on progressive science based research. Individual member state governments could cave in to political pressure from noisy activists and public pressure in areas such as GM soya labelling thresholds deciding for a quiet life to go for the lowest possible threshold just because these people are anti-GM. It could be even more interesting in each of the UK’s devolved regions where individual countries could say no to GM planting but still import. The best word to describe it is divisive and discriminatory against science and technology.

It translates to the fact 27 member states will no longer have a Common Agricultural Policy or indeed a single market as the Commission effectively abdicate their responsibility as they throw the towel in on GM cultivation. It could have serious repercussions for the future and is likely to set a precedent that when the going gets tough the Commission wash their hands of any problem.

Potentially such a decision has huge knock on effects for both the UK arable and livestock sectors.

Wanted – 20/20 Herringbone milking parlour or similar with any fittings feeders, ACR’s etc to fit into new building. Contact Mike or Mark on 07974 111609 & 07772 987046.

0.4ppl milk price increase for Wiseman producers from July 1^st (5^th July 2010)

This takes their milkprices.com standard litre price to 24.72ppl. Competitor liquid processors Arla are at 24.50ppl with Dairy Crest bringing up the rear at 23.84ppl almost 1ppl behind Wisemans however this excludes the allocation of the Morrisons premium.

Belton Cheese (2^nd July 2010)– Increase milk price 0.6ppl from 1^st July. This is their 3^rd increase this year following 0.5ppl in January and 0.3ppl in May.

Dairy Crest (2^nd July 2010) - Davidstow price increased by 0.75ppl, but, significantly, no price movement on liquid – which no doubt reflects the price Armageddon going on in the middle ground market, and which DC is heavily exposed to.

DC’s cheese price now exceeds its liquid price, with other major cheese players bearing down on or matching liquid prices.

Wiseman (2^nd July 2010)– letters are due out on farms this weekend. Talk at the mid week Dairy UK dinner was that 0.5p would be a bridge too far because of DC’s lack of a liquid price movement, with a rise 0.3 to 0.4 more likely. If the later price holds true it means Wiseman would be paying 24.72, Arla 24.5 and DC well adrift at 23.84 ppl.

Defra farm gate price (2^nd July 2010)– for May 23.63ppl up 3ppl on the same month last year and 0.06ppl on the previous month.

Gregory’s gone (2^nd July 2010)

Visit the News section of Holstein UK's website and the top story is "2010 Holstein Celebration". It's about herd visits later in the year.

But the real Holstein celebration of the year (decade?) is that the current Chief Executive, Greg Ward, has gone - to cheers around the office. Officially he has departed for "personal reasons" but the curt nature of Holstein UK's announcement suggests otherwise. All it said was "We would like to thank Gregory Ward for his service to the Company and wish him well for the future."

The term "we" in this case" is believed to only refer to about one or two people within Holstein UK and trawling the membership to identify them will take some time. His responsibilities have been assigned to the Company Secretary, Greg Watson.

DairyCo loses data (2^nd July 2010)

DairyCo has apologised to 13,000 GB farmers after a laptop containing names and address of levy payers was stolen from a car parked overnight at a hotel on the 9^th June.The snatch and grab was one of a number at the same hotel on the same evening and it is understood it was a laptop which belonged to one of Dairy Co’s extension staff who at best will now be facing disciplinary. Fortunately, however, there was no personal or financial data which DairyCo believed could be used to defraud farmers and the data was not up to date. The information in the file consisted of names, addresses, phone numbers, volume of quota held, and TRN numbers. The information is of limited use, interest or value to any one other than perhaps a National Feed Company and is unlikely to be utilised. All of the Dairy Co data is now held on a secure head office computer.

Milk link to reduce production bonus from April 2011 (2^nd July 2010)

Milk Link has advised members the current 0.8ppl production bonus will be reduced to 0.5ppl from April 2011. The bonus which was first introduced in October 2007 of 0.3ppl increased to 0.8ppl in July 2008 and is paid providing the members monthly production is at least equal to the same month the previous year.

Paice puts cat among Dairy UK pigeons on contracts (2^nd July 2010)

Speaking at this week’s gathering of the industry’s great and the good, at the Dairy UK dinner, Farm Minister Jim Paice said he was in favour of the High Level Group moving forward on the issue of better producer milk contracts. This will be music to the ears of the NFU but as welcome as a Uruguayan referee at Wembley to Dairy UK, who see few reasons for marked changes in contracts.

High Court judges to decide on Welsh badger cull (2^nd July 2010)

Following a one –day appeal in Cardiff on Wednesday the decision on whether to action a badger cull in Wales is to lie with 3 High Court judges. Their ruling is expected on 12^th July.

BBC2 Wednesday 7th July-The Private Life of a Cow 8pm-9pm (2^nd July 2010)

The programme will be presented by Farmer and potential farming ambassador Jimmy Doherty. Should be worth watching

Potter back at his desk next week (2^nd July 2010)

Potter and Son will be back from South Africa on Monday from a World Cup which has seen England fans have a fantastic time in the Rainbow Country in yet another trip where the football was a waste of time.

Normal hard hitting reviews of the good bad and the ugly in the dairy industry will resume next week when our roving traveller is harnessed back at his desk.

Dairy Crest price increase for cheese but not for liquid suppliers (25^th June 2010) from the 1^st July Davidstow suppliers will receive a 0.75ppl increase. However there is no mention of Dairy Crest increasing the liquid milk price for July.

First Milk increases prices across the board - (25^th June 2010) for all its members from 1^st July 2010 liquid pool: 0.6ppl increase, balancing pool: 0.4ppl increase and the cheese pool (including Highlands and Islands): 0.25ppl increase.

Chairman Bill Mustoe commented: “In 2010 this equates to a cumulative 2ppl increase to those in the liquid pool; a 1.5ppl increase to those in the balancing pool; and a 1.25ppl increase for those in the cheese pool.

This is our fifth increase in 2010 and we will look to lift members milk price again as we secure more returns from the marketplace and make further progress on efficiency savings.

UDF milk auction prices drop 1.15ppl (25^th June 2010) -Northern Ireland co-op, United Dairy Farmers saw 53 million litres sell at its June auction this week to average 25.38ppl for one months milk to be delivered in July.

This is a 1.15ppl decrease on the May 2010 auction (26.53ppl) and a 6.55ppl increase on the auction results seen in June 2009, which only averaged 18.83ppl.

1ppl milk price for Meadow Food Suppliers (25^th June 2010) – From the 1^st July this will take their price to above 24ppl and all 520 suppliers will benefit regardless of their specific contract. The company said hoped this would inject some further positive momentum into the market and encourage others to come forward with similar increases.

Simon Chantler, Meadow Foods’ Executive Chairman, said “We will continue to work hard to sustain and further improve on this price increase but our best efforts will not be sufficient to achieve this unless the market as a whole move upwards.”

Lactalis McLelland 1ppl price increase (25^th June 2010) – from 1^st July for its Caledonian direct suppliers taking their standard Flagship price to 24.4ppl.

Saputo increase July 10^th milk price and cut producer contract notice period (25^th June 2010)

From July Saputo Cheese has confirmed that for the 3^rd month running they are increasing their price paid to producers this time by 0.5ppl. They’ve also reduced their termination notice period from 12months to 3 months making them the first milk processor in the UK to reduce the notice period in an existing contract.

United Dairy Farmers, NI (25^th June 2010) – increased their May 10 base price by 0.5ppl to 25ppl compared to 18ppl in May last year.

The NFWI expressed their support for the Dairy Industry (25^th June 2010) -. In her campaign update speech at this year AGM in Cardiff Marylyn Harries-Evans (Chair of Public affairs committee) said "we have been incensed once again by the fall in milk prices and the subsequent haemorrhage of dairy farmers from the industry. Matters improved for a time following our Great Milk Debates in 2006/7, but we need to take action again and will be organising round table talks with all interested parties soon so that a united effort can be made to restore fair pricing to our dairy industry". Let’s hope with a membership of over 205,000 this campaign can gather some momentum.

71 cows for sale including 15 in calf heifers (25^th June 2010) - spring calvers recently PD'd . Majority are Friesian/Jersey crosses in calf to Norwegian Red, the heifers are in calf to easy calving Blonde D'Aquitaine cross. All animals TB free, BVD & Lepto vaccinated and low Johnes status from 2nd June recording. All in milk and have to be off farm by 15th July. Contact Charles Harrison on 07753 418468.

0.5ppl milk price increase for Glanbia Cheese Anglesey (18^th June 2010) from the 1^st July (23.78ppl) this is their third consecutive monthly 0.50ppl increase (May, June and now July) reflecting improved market returns.

0.88ppl price rise Milk Link Cumbrian Direct Group suppliers for June 2010 (18^th June 2010)

Cumbrian Direct Group suppliers to Milk Link delivering to Lockerbie are to receive a price increase of 0.88ppl for June taking their flagship standard litre price for 4% up to 24.75ppl.

High Level Group (HLG) final report on milk (18^th June 2010)

The High Level Group of Experts on Milk (HLG) created by the EU Commission to examine the long-term future of the EU dairy sector released their final report this week. It highlighted an imbalance in bargaining power between farmers and dairies, leaving dairy farmers at a disadvantage when negotiating milk prices and proposes “enhanced formal written contracts between producers and processors” and urges the Commission to “encourage the use of contracts that set out in advance terms including price, volume, timing and duration”. It suggests member states could make the use of such contracts compulsory.

The European Dairy Association (EDA) which represents processors agreed that contract guidance would be helpful but that making a single set of contracts mandatory would be inappropriate.

Whilst the NFU feels the report supports their calls for better contracts and a fairer supply chain the European Milk Board (EMB) Vice President from the Netherlands Sieta Van Keimpema feels that there are only two points that can be regarded as positive, one is the strengthening of the legal basis for producer organisations to give them more bargaining power with dairies and the other is the proposal that addresses better labelling of dairy produce.

To view the entire report click here.

Dairy UK said that “A lot of the recommendations of the HLEG, such as those on contracts and producer organisations, are intended to address issues in other member states. It is absolutely vital that the Commission doesn’t impose retrograde measures on the UK that could actually harm our dairy industry or distort the market.”

Johal lose yet another court battle (18^th June 2010)

Midlands middle ground retailer JN Dairies (represented by Burges Salmon) has won yet another courtroom battle against rivals Johal Dairies (represented by Druces). This time Johal claimed that JND had no valid claim for damages after it was originally proven in court that Johal had paid an illegal immigrant to steal JN Dairies’ invoices in 2008. Johal then unlawfully used the invoices to pinch JN Dairies’ customers. But the argument was rejected by Judge Cooke (who Johal/Druces remarkably and unsuccessfully accused of bias at the original trial) this week.

This is the third hearing at which Johal has lost since the case began. Johal must now hand over even more cash to JN, at the same time as the two companies are engaged in a bitter price war.

Now the parties will prepare for a hearing in Birmingham Chancery Division, when the High Court will decide the amount of damages Johal Dairies will have to pay.

World milk output (18^th June 2010)

World milk production in 2010 should reach 712 million tonnes, or an increase of almost 2 percent over last year, according to The Food Outlook report from the FAO Trade and Markets Division. Production should grow by over 3 percent in developing countries, notably in Asia. In North America milk production will increase slightly to 86 million tonnes, on account of improvements in the price ratio of milk to feed concentrate and a slowing of cow slaughter rates. Production in Europe is anticipated to stagnate in 2010.

3,000 cow “Super Dairy” plans abandoned (18^th June 2010)

Velmur Ltd, the developers behind the proposed 3,000 “super dairy” at South Witham in Lincolnshire have dropped their plans for a 3,000 dairy following strong opposition from local residents and welfare campaigners. Pressure group Viva! Claim the abandonment was as a result of their letter writing campaign to landowners.

The focus will now turn once more to Nocton Dairies, which wants to build an 8,000 cow dairy. It is likely to resubmit planning permission in the next two months or so.

New website to explain all about dairying (18^th June 2010)

DairyCo has launched a new website (www.thisisdairyfarming.com) to provide consumers and press with facts about dairy farming. The new website presents the realities of modern dairy farming while also dispelling myths and misconceptions about the industry. Visitors can see how dairy farmers care for their cows and the environment, and take a virtual tour of a typical farm.

0.75ppl for Milk Link suppliers from 1 July (11^th June 2010) (On top of 0.5ppl for May, and a 0.35ppl Processing Interest payment also in May). The increase takes Milk Link’s standard litre price for manufacturing milk to 24.5ppl and for liquid milk to 24.72ppl.

0.5ppl milk price increase for Muller suppliers (11^th June 2010) from 1st August taking their ‘Flagship’ standard litre price up to 26.2ppl.

NFU’s Great milk robbery(11^th June 2010)

Last Friday saw the NFU'S dairy board Chairman Mansel Raymond highlighting the fact that additional money in the form of increased milk prices is long overdue to dairy farmers.

There can be no doubt this is correct and July 1st had better bring pennies as opposed to points of pennies increases. However some of the detail and numbers supplied by The NFU  as to what the recent market increase for  cheese, powder and cream translate to would certainly not stand up to scrutiny from anyone who studies the numbers in great detail. The reality is that to convert current prices for the likes of cheese and powder for May’s milk and to come up with the big numbers quoted indicates the NFU Economics department have naively assumed no milk product has been forward sold and is all sold on monthly or spot contracts, which clearly is not how the real world operates..

So whilst the need for increases is indisputable it’s perhaps a good idea if we stick to accurate and justifiable figures which perhaps is the domain of Dairy Co and its Economics Department Datum.

Milk Link performs well in difficult year(11^th June 2010)

Whichever way you look at it last year was a crap year to be in the cheese business, what with low prices and murderous brand discounting at retailer level.

Nevertheless Milk Link still managed to perform “solidly”, according to the company. Between 3 April 2009 and 2010, its tenth birthday, turnover increased marginally from £547m to £550m, EBITDA was up from £28.7m to £29.2m, profit before tax increased to £10.6m and bank debt rose £4.8m to £80.9m, despite Milk Link buying DFB’s Llandyrnog creamery for £25.6m during the year. On top of that the co-op effectively “owes” members £59.4m, which is the total amount of money now sitting in Member’s accounts. Against those figures were stocks worth £90m, debtors of £55m and some cash under the mattress Last year it paid out £3.3m to members as a processing bonus and £1.59m to retired farmers, a figure similar to the year before.

The company achieved its growth by switching milk out of cheese, by expanding business with retailers and food sector businesses, by diversifying into specialist cheese and building sales of its brands (Tickler sales up 56%, Flora pro-active up 15% and Moo milk up 18%.)

The amount of milk handled increased by 13%, thanks to 600 new members and direct suppliers joining the business.

Chairman Ronnie Bell said the co-op made “good progress”. Neil Kennedy said that this year would continue to be tough, but that it had had a good start to the year.

Peasants Revolt(11^th June 2010)

Following on from last weeks "Peasants Revolt" comment a number of our farmer readers of the bulletin put pen to paper and made their thoughts clear to their respective milk purchaser and copied me in on their thoughts. Full marks to all of those who took the time to respond. The dam is building up slowly.

Raid on Freshways could cost then £250,000(11^th June 2010)

London based middle ground milk purchaser and processor Freshways have been raided by The UK Border Agency who have arrested 24 of its Indian and Pakistani staff for a number of offences, mainly involving illegal entry into the UK and for outstaying their visas. The raid and arrests have been followed by a warning from the Agency that they could easily now be staring down the barrel at fines of up to £270,000 unless they are able to prove they carried out the correct ‘right to work’ checks on the employees. However it is believed that no one from the agency has spoken to the Directors of Freshways and has not asked the company to show what diligence was carried out. Freshway says that all Border Agency guidelines had been followed and that correct documentation has been filed.

Arla (11^th June 2010)

A number of rather annoyed South East region Arla Milk Partnership members have contacted IPA with their version of events which led to the failure of Alistair Jefferies to retain his seat on the AFMP board.

Alistair had completed one term of office on the AFMP board and was re elected unopposed by his regional committee. That was the first hurdle of three safely jumped. For stage two it was simply a case of receiving majority support from his fellow AFMP board before progressing to the final stage three. To the surprise of most in the South East, Alistair did not receive the support of the board and was ousted. Behind the scenes it would appear the issue was what farmers call “outspokenness” which others term “unprofessional conduct”. Whatever the correct description it’s yet another controversial issue in the history of AFMP.

Muller embarrassed by website gaff(11^th June 2010)

There’s no such thing as bad publicity, they say. Well such might be true for Muller Dairy this week, which got widespread press coverage for its website and corporate brag about its Shropshire links and heritage. Red faces all round, then, when it was revealed that the image used to front up the website and to declare a resounding “Welcome to Shropshire” from Muller was, in fact, a picture of a town in Wiltshire.

Wiseman and Arla set to battle it out(11^th June 2010)

The news that Asda/Wallmart intend to acquire the Netto chain of supermarkets, subject to OFT Approval, will undoubtedly have caused shivers down the spine of both Wiseman and Arla sales executives. With Nettos milk currently supplied by Wisemans and Asda’s by Arla the two will once again be battling it out for supremacy with the new combined businesses. Such a battle is sure to put a smile on the faces of the new retail dairy buyer’s face.

May milk production (7^th June 2010)

UK milk production for May was 1,237.6m litres non butterfat adjusted 34.7m litres up on May last year however butterfat was down by 13 points at 3.80. Cumulatively the UK has produced 2,370.7m litres non adjusted 24.2m litres up on the same period in 2009. Cumulatively butterfat is 3.87.

First Milk 1^st June price increases (4^th June 2010)

The co-op has announced the following price increases to be applied from 1^st June

0.5ppl – Cheese producers

0.35ppl – balancing

0.3ppl – liquid producers

Auction prices ease a shade 4^th June 2010)

Commodity prices have certainly peaked. This week’s Fonterra world auction produced a mixed bag of results. Below are the price changes in $ and % compared to one month earlier.

May June $ Change % Change

AMF $5020 $5324 +$304 +6%

SMP $3612 $3462 -$150 -4.15%

WMP $3932 $3790 -$142 -3%

All products average $3981 $3880 -$101 -2.53%

Weekly prices quoted by the Dutch Dairy Board have also eased a shade.

Italian spot milk price hits 30ppl 4^th June 2010)

According to DIN Italian spot milk prices have risen to 35.8 Euro/cents litre equivalent to 30ppl.

Revolt by wholesale dairy companies over discount milk prices 4^th June 2010)

Last weeks bulletin article “It’s time for serious questions on middle ground discounting” prompted a flurry of emails from wholesale milk businesses across England and Wales wishing to vent their anger over the current deals they are facing.

Four came from the Cardiff area where Wiseman branded milk is being sold at Batleys and Bestways Cash and Carry at a discounted rate of £2.49 for 4 x 2 litres of either whole or skimmed milk with the guarantee from Batleys that these prices will be held long-term. This equates to a ridiculous 31p/litre.

Within days their cash and carry competitor Bookers had the same deal with their own Happy Shopper brand which Wisemans package for them.

Similar deals in the Midlands are on offer with reports of both Dairy Crest and Wiseman branded milk selling in shops for 59p for 2 litres (29.5ppl)

In the North East of England Medina have offered shops milk as low as 50p for 2 litres with a so called 2 year price guarantee as they ramp up output at the ex DFB plant at Blaydon.

Three questions arise:

When will it end and how long before all customers demand milk at these prices?

Why devalue milk to this extent?

Is this middle ground battle the main reason farmgate prices for liquid not rising?

These deals are devastating and crippling existing wholesale businesses and doing nothing to improve farmgate prices. Farmer’s frustration should be boiling over but most appear to be happy with their lot not even questioning their milk buyer or farmer representatives. What will it take before the peasants revolt saying enough is enough?

The end result is wholesalers are forced to match price Wiseman and Dairy Crest milk and in turn demand lower prices from their manufacturers and the last domino in the pack is the dairy farmer. No significant liquid farmgate price increase will be on the stable as long as this continues to happen.

AFMP re-balances producer investment 4^th June 2010)

Arla Farm Milk Partnership will re-balance producer investment based on production to 31^st March 2010. Producers who have expanded will be required to pay the 1ppl top up on the additional litres and any who have decreased production will receive a rebate. Slightly different rules apply to those who came to Arla as a result of the demise of DFB.

3,000 cow Lincolnshire dairy on the drawing board 4^th June 2010)

If ever there was any doubt that GB dairy farming could indeed be moving onwards and eastwards, another proposed Lincolnshire unit certainly demonstrates this direction.

The latest proposal comes from a partnership involving three Southern Irish farmers seeking to establish a green field operation for 3,000 cows close to Grantham. This size of unit would normally receive little, if any, media coverage but been the back yard of the Nocton proposal it will be interesting to see if any ill-educated clowns come out to criticise this proposal and start using sensational words like factory or battery.

0.5ppl milk price increase for Glanbia Cheese Anglesey suppliers – from June 1^st (28^th May 2010)

This is the second consecutive monthly increase from the company taking their standard litre price to 23.28ppl.

1ppl milk price increase for Saputo suppliers – this will be 0.5ppl backdated to May and 0.5ppl for 1^st June. (28^th May 2010)

£3.3 million interest payment to Milk Link member (28^th May 2010)

As a warm up to the release of Milk Link’s 31^st March 2010 year end results, expected on 9^th June, the co-op has announced this year’s annual member interest payment on qualifying loans will be £3.3m a reduction of £800,000 on the £4.1m paid in the previous year.

The payout represents an 8.1% return on member loan balances (10.8% return 2009) and will equate to a payment of around £2,000 or 0.35ppl (0.4ppl 2009) for the average Milk Link producer.

The amount invested by members has increased during the past 12 months from £38million to almost £41 million.

£162m slashed off DEFRA’s 2010/11 budget (28^th May 2010)

As expected DEFRA’s budget for the current financial year has been cut as part of the Government’s £6.2 billion cost cutting exercise. The result is DEFRA will have to make £162m cost savings out of its £3 billion annual budget.

Is it time for Rottweilers to replace the Welsh and English Corgis? (28^th May 2010)

Last week’s article headed “How long will farmers sit back and watch others pocket the market gains” prompted a flurry of interesting responses.

One suggested that so-called farmer representatives are “all turkeys with fat salaries not prepared to risk their positions” who are quick to release statements in support of downward movements but there is now a deafening silence when comments demanding upward movements are necessary.

The effectiveness of DCD and AFMP were the subject of several comments as were the NFU Dairy Board with one concluding “I ask myself: do we need to get Handley back!”

Then followed a robust defence from DCD who pointed out that according to milkprices.com DCD’s “non-aligned liquid price actually eclipsed the equivalent Arla and Wiseman prices during last milk year – albeit only just.” So that means DCD must be doing a good job! (they said.)

Perhaps, indeed, it is time for someone like David Handley to be recruited again to the front line. If not perhaps The European Milk Board or Dairy Farmers of Scotland should be persuaded to get stuck in.

It’s time for serious questions on Middle Ground discounting (28^th May 2010)

It’s time for someone to dig deep into the murky world of the Middle Ground market, and to ask why margins are being not just given away but thrown away so recklessly.

Not only are there alarming issues concerning one middle ground milk seller and its ability to pay all its direct supplying farmers on time, but there are long terms deals at totally unsustainable prices, which are a key factor in preventing overdue ex-farm gate milk price rises.

Local shops and garages in The Midlands are known to be selling premium Dairy Crest and Wiseman branded milk at 99p for 6 pints, as a price war continues between two rival BMB (Bottled Milk Buyers) dairies, with one clearly trying to destroy the other, and the latter forced to defend its market. We estimate the price crashing BMB could be selling the six pints to the shops for around 80p. Do the sums!

Why do Dairy Crest and Wiseman sit back and allow this to happen to their brands? Questions need answering, and quickly, as this market is probably the major reason DC and Wiseman didn’t put the price up.

It’s not very long ago that DFB inherited a cripplingly low priced contract to supply Medina, which at least had an expiry date but some of these retail outlets have contracts offering them milk for the same current low price “fixed forever”.

There is a never ending war in the middle ground but when you can see branded milk at such low prices it is time the owners of these brands made a stand. If the price war continues there will be no liquid price rises, and a near certainty that one or more of those involved in middle ground selling will go to the wall and everyone will catch a cold.

England v Hungary – Wednesday 11^th August 2010 at Wembley (28^th May 2010)

Up to 5 tickets available in any area of ground at £5.00 per ticket discount. Anyone interested in 2 or more tickets email Ian on ianpotter@ipaquotas.co.uk

Milk auction prices continue to head north (21^st May 2010)

Northern Ireland co-op, United Dairy Farmers saw 52 million litres sell at its May auction this week to average 26.53ppl for one month milk to be delivered in June.

This is a 0.45ppl increase on the April 2010 auction and a massive 7.31ppl (38%) increase on the auction results seen in May 2009, which only averaged 19.22ppl.

1ppl milk price rise for Parkham Farms suppliers – from 1^st June 2010 (21^st May 2010)

Dutch prices show a mixed bag (21^st May 2010)

The Dutch Dairy Board’s weekly commodity figures show SMP, WMP and whey powder prices have levelled or even eased a shade whilst butter prices continue to firm up a further €100 tonne in the week to reach €3,700/tonne, which is a record for 2010 and a price for butter not seen since December 2007.

Commission commence release of Intervention stocks (21^st May 2010)

With 190,000 tonnes of SMP and 25,000 tonnes of butter sitting in Intervention stores and prices for both very strong, the Commission has decided to invite tenders for all of the butter and up to 140,000 tonnes of the SMP. This will certainly dampen down the market but hopefully it will not cause it to rapidly hit reverse from early June when a decision on the tenders will be made.

How long will farmers sit back and watch others pocket the market gains? (21^st May 2010)

Questions are now being asked by a handful of farmers as to why the seismic gains in the commodity markets are failing to filter through to farm gate prices?

During 2009 several processors both large and small quoted falls in commodity prices as the reason for dropping milk prices. For example a Dairy Crest press release stated, “The changes reflect the falling returns from commodity dairy markets” the statement was backed up by its farmer representatives press release.

In the same month an Arla press release stated “However, as 2008 has progressed the underlying trend within the commodity markets has been one of constant decline. The consequence of Arla of the downturn of these markets (referring to commodity markets) is now so significant that, unfortunately, with the commodity income no longer available. Arla is not able to financially support the AFMP milk prices” again the statement was backed up by AFMP representatives in the same release.

Meanwhile, Wisemans press releases at the same time focussed on the fall in bulk cream prices (something it addressed on 1^st August 2009 with a 0.3ppl increase) and its need to maintain its competitive position. This mirrors the comments made recently by Robert Wiseman at the annual DIN Conference where he commented his company cannot be undercut by predatory competitors, however, what price they pay for milk is not as important to their margin.

So it is a puzzle as to why those who claim to represent farmers accepted the 2009 cuts on the basis of falls in commodity prices but are not shouting loud for farm prices to increase significantly now the position has reversed and markets have been on the up for several months.

Do farmer representatives and some of the milk processors and dairy companies think farmers are stupid?

It’s high time a number of processors, plc, co-op and independents reconnected the farm gate price with the realities of the market place. Limiting upward movements to zero or fractions of a penny will end up in tears.

Futures trading of SMP and butter to start this autumn (21^st May 2010)

The New York Stock Exchange Liffee European dairy futures contracts are on target to start trading in September commencing with SMP to be shortly followed by butter futures.

Euronext will be in charge of the trades involving 24 tonne loads of SMP in 25kg bags and 12 tonne lots of butter in 25kg cartons all of which initially will come from the EU. Physical delivery and cash settlement will be the order of the day and once trading starts it will provide another price index for farmers and processors to carefully track.

43% rise in Wisemans profits (21^st May 2010)

Wisemans profits rocketed up to a mouth watering £50.3million (an increase of 43%) compared to last years results.

Volumes of milk processed were at a record 1.77billion litres and turnover on this literage came to £886.2million (50p litre). Operating profit increased by 25% to reach 2.74ppl.

Nett debt reduced from £25.8million to £21.1million.

Note: Ian has not had time to study the accounts in detail yet.

Alan Wiseman sells shares and stands down as Chairman (21^st May 2010)

Hot on the heels of the Wisemans profit announcement comes the news that Chairman, Alan Wiseman will stand down at the companies AGM on 8^th July. This will make way for brother Robert to take the role of full time executive Chairman with Billy Keane promoted to group Finance Director.

In addition this week Alan sold 420,000 of his shares in the business for £4.80 to clock up over £2 million whilst still retaining 10.6million shares equivalent to just over a 15% stake in the company.

5% rise in Dairy Crest profits (21^st May 2010)

DC’s profits for the current year ending rose by 5% to £83.5million from £79.5 million in 2009.

By sector/division the operating profit from its liquid division increased from £7.9million in 2009 to £34.9million this year boosted by higher cream returns. Meanwhile, profit in its cheese division fell from £34.3million to £16.9million influenced by its heavy promotion of Cathedral City, which saw sales values up by £15.8million (6.5%) to £260million but profits halved. Turnover is vanity but profit is sanity or so they say.

DC’s net debt has been reduced by an impressive £79million from £416million to £337million.

Note: Ian has not had time to study the accounts in detail yet.

Is Ebay the key to DC’s debt reduction? (21^st May 2010)

Police are investigating sales of a number of Dairy Crest’s milk trolleys on Ebay which new cost around £100 each. Are these stolen trolleys or is it part of DC’s debt reduction plan?

Coalition government set to axe quangos (21^st May 2010)

A staggering 1164 quangos exist of which around 30 fall under agriculture’s umbrella and the new government has confirmed it will reduce the number and cost of these quangos.

Heifer rearing in 4-year TB testing area by ex-dairy farmer (21^st May 2010)

Former dairy farmer has a very modern set of loose housing buildings for up to 200 cattle available for heifer rearing in East Yorkshire. Able to take cattle from weaning to bulling or closer to calving. Excellent access, ample straw with opportunity for very cost effective transport. If interested email ianpotter@ipaquotas.co.uk

Ian Potter Marketing Services Limited (t/a Ian Potter Associates)

Registration No:   7219456          Registered in England