Cull Cows Required
M 62
Coast ¬ To ® Coast
¯
All types of cows required.
Prompt payment.
No commission.
Welfare conscious approach
contact 01335 324594 or email sales@ipaquotas.co.uk for further
details
Prices steady at milk auction (5th
March 2010)
Tuesday’s
Fonterra milk product auction results gave a glimmer of hope that world
commodity prices have stabilised.
WMP
prices averaged $3,281/tonne, an increase of $25 (0.8%) on February’s auction -
a small but nevertheless welcome increase.
In comparison the WMP price a year ago was a very low $2,158. This month’s auction saw the first auction of
SMP, which averaged $2,927/tonne for 7,500 tonnes.
DEFRA allocates £26millon equally to
all dairy farmers (5th March 2010)
Following
industry consultation DEFRA is to allocate the £26million EU dairy fund evenly
at a flat rate of around 0.2ppl for non-butterfat adjusted production across
the 12 month period from October 2008 and September 2009. Any producers who delivered less than 50,000
litres in the year will miss out, meaning the minimum payment will be around
£100 per farmer. An average payment of
around £1,500 is expected and payments from the RPA are expected around mid
April, however, the press release does not say in which year!
Arla Foods AMBA dresses up its
results to deliver a healthy profit (5th March 2010)
Arla
Foods AMBA have trumpeted their 2009 results in a three page press release, which
reports global profit of £117.4m, and representing an increase of around £8.6m
on budgeted profit.
It’s
a good headline together with details of its plans to increase its share of
branded milk in 2010 and its intention to invest £35m in marketing activities
for its top four brands.
But,
as they say, all that glitters is not gold, and the full 44 page report makes
for more interesting reading and will be a subject Ian will return with a few
interesting nuggets for you to digest.
Just to give readers a flavour of what is to come,
it is interesting to decant the
Does
this translate to them offering very cheap milk to new and existing retail
customers? Or is it just a simple milk
price related effect?
Déjà vu in yet another David v
Goliath contracts battle (5th March 2010)
During
the past couple of years both Arla and DFB have taken farmers to court over
what they believed were clear breaches of contract and in each case the dairy
processors have lost and had costs awarded against them. We estimate from the information we have that
these cases cost the processors in excess of £200,000.
It
has now emerged that a below average Scottish milk producer is to be taken to
court by First Milk in another David v Goliath locked horns battle. The producer has evidently engaged a leading
firm of agricultural lawyers in Edinburgh who, like those who went before them,
feel quietly confident, especially having the knowledge and outcome of the
previous court cases.
It’s
a high risk game because, like all milk purchasers, First Milk will be keen to
be seen to be standing firm and insisting that the producer be held to account
and to serve his full contact notice.
However, should it lose it has the potential to open the floodgates,
although each case has to be assessed on its merits.
The
producer involved is quoted as receiving less than 20p/litre, and is unable to
support his young family without taking a part time job. Whilst
not a legal argument this will undoubtedly tug at the heart strings. He
wants to change milk purchaser earlier than the notice period dictates and “is
resolute in his determination to have his day in court and say his bit in front
of a judge” rather than watch his business slide downhill. Already he has some “interesting”
supporters who are prepared to quietly back his stance, and the belief that the
notice period is an unfair contractual term.
Morrisons and First Milk on farm
initiative (5th March 2010)
Morrisons
is to provide funding to a nationwide network of First Milk farmer focus groups
for research projects which, if successful, will be rolled out to other dairy
farmers. First Milk currently supply the
lions share of Morrisons own label cheese and the funding provided by the
retailer will be aimed at projects which will improve the sustainability and on
farm efficiencies of the British cheese supply chain. All results of the joint initiative will be
shared with producers. Types of research envisaged include topics like
renewable energy, cow longevity, wind energy etc. This is a completely
different approach to that taken by other retailers who tend to focus on their
own dedicated farmer suppliers. A group
of First Milk farmers in Ayrshire will be the guinea pig focus group.
We
have heard lots of excuses as to why the RPA are late with individual farmer’s
2009 SFP payments, but the reason given to a handful of farmers in the Church
Minshull area of Cheshire is a new phenomenon.
Unless any farmers within a 4 mile radius of the village can inform us
otherwise, it appears none have been paid their 2009 money and the RPA claim it
is due to “technical difficulties” experienced during the summer with a
satellite. Sounds like a job for the
Thunderbird 5 Space Station Communications and John Tracy! With its automatic translators and filters
its positioning over the green and pleasant lands of Church Minshull will
resolve any RPA satellite problem.
0.5ppl increase from Helers - from 1st
March. This is only the third price increase recorded in 2010 all of which have
come from predominantly cheese makers. (26th
February 2010)
0.5ppl price reduction for United
Dairy Farmers – for
January. This reduces the co-ops standard
litre price to 26.84ppl. (26th
February 2010)
DEFRA December average farmgate milk
price 24.71ppl (26th February 2010)
Compared
to 26.38ppl in December 2008 (-1.67ppl) a reduction of 6.3% in 12 months.
November 2009 average was 24.88ppl.
Auction prices ease but are still
highest recorded for February (26th February 2010)
Thursday’s
Compare
this to 12 months earlier where a similar literage of 44million litres average
only 17.82ppl, which was down 0.68ppl on the January 2009 average.
Average Literage
sold Change on previous month
February
2010 23.32ppl 46million -0.73ppl
January
2010 24.05ppl 38million -3.67ppl
February
2009 17.82ppl 44million -0.68ppl
January
2009 18.50ppl 45million +1.87ppl
Dairy Co Company report hits the
radar (26th February 2010)
The
150 page report is now on general release and whilst it has received some
criticism it does form a very useful reference point for levy paying farmers
and at a cost of around £2.30 per farmer is a small investment.
Ian
has gone in to more detail as to his thoughts on the report and suggested areas
for improvement and further investigation in future editions in his next Dairy
Farmer article.
NFU Conference (26th
February 2010)
Apart
from the elections two subjects quickly rise to the top of the agenda namely TB
and the RPA’s handling of SFP and other matters.
Nick
Herbert MP described the RPA as a shambles and a disgrace stating it was time for a fundamental shake
up.
A
handful of members heckled and protested to Minister Hilary Benn over his lack
of action on TB which is costing the country a mouth watering £80m/year and
rising however the reality is he never intended taking any action on his watch
and it is almost certain this will be the last conference he attends in his
current position.
Peter
Kendalls question was clear but could have been asked by him three years ago
when he gave his first keynote speech “My question to you and to all main
parties is this; what are you going to do to eradicate bovine TB?”
Without
doubt the best question directed at Hilary Benn was “why should farmers vote
for labour?” Answer – we have listened, we have introduced a supermarket
ombudsman, won concessions on sheep EID, and in December I received two emails
from farmers saying thank you for paying my SFP so promptly! Great answer so
you all know why you should vote Labour for more of the same.
Jones climbs NFU ladder in hard
fought contest (26th February 2010)
Current
Dairy Board Chairman Gwyn Jones dualed with 9 competitor candidates in a fight
covering 5 rounds for the position of Vice President of the NFU which he
eventually won by only 2 votes, pipping Alastair Mackintosh. Whilst this is great news for Mr Jones he
leaves behind a vacant position requiring a forward thinking person with enthusiasm
and drive. This looks like a challenge to the NFU.
Gwyn
was quoted as being “almost speechless but highly privileged to be elected Vice
President”. This is an unusual
phenomenon for our Mr Jones and one senior dairy industry figure mischievously
emailed Ian this morning suggesting Gwyn would find it difficult to complete
the task of remaining speechless for long.
Elsewhere
Peter Kendall faced no real competition for the position of President and
Meurig Raymond surprised many when he knocked out all three of his competitors in
the first round securing 66 votes (76%).
We understand both Gwyn Jones and Paul Temple clocked up 6 votes each
and that
New Chairman of RABDF announced (26th
February 2010)
David
Cotton, a dairy farmer from
Morrisons trumpeting is not all it’s
cracked up to be (26th February 2010)
Lots
of noise made by Morrisons and the NFU in the past week claiming Morrisons have
become “the first major supermarket to be awarded Red Tractor Certificates
across its entire fresh meat range, reaffirming its commitment to British
farming”.
So
does this mean Morrisons were previously buying non farm assured meat? Do none
of Morrisons main competitors not source from Assured meat?
Are
Morrisons really telling the truth the whole truth and nothing but the truth
when they claim “We are the only supermarket tht buys livestock directly from
the farmers” knowing they acquire lots of stock from livestock auctions?
When
you peel under the surface you often find the detail reveals a different story
to that peddled on the eve of the NFU’s annual AGM.Conference.
It’s crucial the NFU Council make the right choice (19th February 2010)
The
NFU’s 93 Council members face one of their most important decisions next
Wednesday in deciding who it elects for both Vice President and Deputy
President, because in both cases the council needs to look two to 10 years
down the road as to which two candidates have the potential to be future
presidential leaders.
This
year’s elections have even attracted the attention of Private Eye magazine,
which has highlighted both the
The
spotlight is certainly on the NFU’s Council to make the right choice as the
article highlights the fact the Council have “no obligation to canvas their constituents
about how they should vote” and even if they were mandated they effectively
vote how they personally feel when it comes to the candidates. Thus, Derek Mead
has no chance of getting anywhere even if he has, as he insists, “plenty of
grass roots support”.
Private
Eye suggest the NFU is “run nationally by a small clique who treat us like
their own personal fiefdom” re-inforced by the NFU “Governments” response and
attitude to the resignation and re-appearance of Paul Temple in the past 10
months.
Following
the resignation of Liz Falkingham the article points to the clear road it
presents
Without
mentioning names there are candidates, particularly for the position of Vice
President, who clearly have very high opinions as to their own ability, which
on paper seem to be a million miles away from the calibre, enthusiasm, broad
depth of knowledge and modern thinking that is required to be a future
president.
As
commented by one council member this week, Peter Kendall will be a tough act to
follow because today he stands head and shoulders above all others but he will
have to be replaced in only two years time (or will he?). This Council
member's concern was that too many "old school dinosaur"
council members would potentially make the wrong selection in relation to the
future of the organisation.
Perhaps
the NFU should take a leaf out of First Milk Chairman Bill Mustoe's recruitment
academy, where he clearly does not want a blinkered narrow minded board as he
hunts for people with a broad experience and more on their CV than
simply "having done a Nuffield Scholarship" or the like.
It
will be an interesting pivotal week in the future of the NFU.
Magic Malcolm closes DFB oral
evidence (19th
February 2010)
Up
front and honest straight talking former CEO of DFB last week took to the dock
to give evidence to the EFRA Committee into the collapse of DFB. He confirmed
he had been sacked following issues with Chairman Rob Knight and Philip Moody,
commenting that it was “a shameful situation” with regards to how “out of hand”
their expenses were. He stated that the
advice from Philip Moody was at times dubious and that Knight put his own
personal interests before those of the co-op and its farmer members. No big
surprises there. He also said the DFB Board of Directors, at the time he was
sacked, “could not run a fish & chip shop”. A bit of a complement there
then, given that most DFB members now think they couldn’t wrap fish and chips,
let alone run the shop.
Clearly
Smith had flagged up warning lights and all that remains is for the final
chapter to be written in the form of the EFRA report before the sorry book is
closed. Don’t hold your breath for any
revelations in the report or any villains being named. Our money is firmly on a low key whitewash.
But
at least certain pompous reputations have been comprehensively demolished. Will
EFFP conclude that Philip Moody is (still on The Board) a liability to
them? Will they realise their own
reputation has become a joke in the dairy industry not helped by the continued
presence of former DFB banker Steve Ellwood (still chairman).
New venue and new main sponsors for
Dairy Event and Livestock Show (19th
February 2010)
The
RABDF will have a new main sponsor at its new look 2010 event at the NEC with
Barclays stepping in to replace HSBC, which in a bewindlingly inexplicable move
has relinquished the sponsorship. In a
rather curt press release from RABDF absolutely no recognition or thanks was
given to the support HSBC has given the Stoneleigh Event over the years,
fuelling speculation this was not a harmonious divorce. It is believed a similar fee to the £25,000
paid by HSBC for the annual sponsorship has been agreed with Barclays and no
doubt others would have been keen to enter into negotiations with RABDF if the
opportunity had arisen.
It’s
another example of Barclays being a sharper pin in the banking pin cushion than
HSBC. For example Barclays were quick to pull out of DFB, leaving HSBC as lead
bankers, and the only exposed to the debacle that resulted.
Wisemans unofficial bonus for those
residing at Her Majesty’s pleasure (19th February 2010)
Some
(not Ian) say that Scotsmen are
Alas,
though, one worker has taken the company philosophy a step too far this week.
On a day when the national news has highlighted the huge problem of prisoners
receiving smuggled mobile phones, allowing them to carry out illicit activities
including drug trading, bullying and gang problems, it has been revealed that a
milkman at one of the firm’s dairies has been using Wisemans milk cartons to
smuggle in the phones to a local Nick. He allegedly opened the cartons,
inserted waterproof phones and re-sealed the tops before setting off to make
his delivery. Needless to say that he has been charged by The Bill.
Clearly
the said milkman hadn’t ever worked in the Wiseman marketing department. Had he
done so he would have designed a fancy new label for the bottles and called it
Freshn’Ello.
Will farmers shed a tear or smile
for Kevin Hawkins? (19th
February 2010)
Kevin
Hawkins is a man who, in recent years, has certainly had the knack of winding
It
would appear from a story in DIN that Hawkins is one of 11 former Safeway staff
whom Morrisons are targeting a £10m damages claim following price fixing fines.
If, found guilty he is almost certain to be liable for some financial
redress. Pass the tissue box round.
Words like “he has had it coming” spring to mind.
Minister confirms TB compensation is
inadequate (19th
February 2010)
Ian
attended yesterday’s NFU dairy farmer representative summit, which he will
cover in more detail in his next Dairy Farmer article.
One
revelation came from DEFRA Food & Farming Minister Jim Fitzpatrick in his
key note speech. He confirmed that on
Monday & Tuesday this week he had seen TB reactors ready to go to the
abattoir and admitted the compensation would not cover the cost of
replacement. The speech was recorded and
must be like throwing meat to the NFU’s lions (if it has any).
NFU celebrity wedding of the Year (19th February
2010)
Some
choose to announce their forthcoming marriages in the Court and Social pages of The Daily Telegraph, or The Times. Perhaps even Tatler magazine, or Country Life.Not so for budding
NFU Deputy President and East Yorkshireman Paul Temple,
and fiancée Liz Falkingham, the NFU’s Director of Communications.
They have recognised that there is only ONE Society newspaper worthy of
announcing their forthcoming marriage: in the pages of Potter's Bulletin as opposed
to the pages of
The wedding will be on 11th
April this year, and there is no doubt it will be one of
Commodity auction prices up 76% in
12 months (5th February 2010)
This
week’s monthly commodity auction by Fonterra defied several pundits predictions
that prices would drop significantly with the results best described as
plateauing compared to those recorded in January.
WMP
averaged $3256/tonne, which was a mere 1.6% below the January average ($3309),
however it was a healthy 76% higher than the February 2009 average of $1851.
The
average price achieved for a small tonnage of AMP/butteroil was $4183/tonne
(-7.9% on January’s auction average).
Several
world analysts are predicting world commodity prices to ease back as we head in
to Spring with the near certainty volumes of European SMP will be placed in to
intervention.
Philip Moody is a rat and Rob Knight couldn’t run a bath! (5th
February 2010)
These
were a few of the comments made to the EFRA committee by DFB’s former Council
Chairman Stephen Yates as he vented his fury and played a tune that was
designed to be popular with any ex DFB farmer audience.
Yates
accused Philip Moody of being a lying rat and talking a lot but delivering very
little and commented that former CEO Andrew Cooksey was a “pussy cat” who could
not even organise his in tray.
Yates
said he was “aghast” that his DFB Council approved the appointment of Chairman
Rob Knight having had the opportunity to re examine Knights CV it was clear to
Mr Yates that Knight was a salesman who had never run a company and “could not
run a bath”.
He
confessed that DFB’s Council were “bamboozled” in to agreeing to Philip Moodys
proposals and that DFB Council should have listened harder and acted on the
advice received from Rabobank and that “Council had little knowledge of the
numbers”. Sorry but as Chairman of the Council who by his own admission was
very close to the auditors this last statement is not accurate.
Whilst
Philip Moody has rocketed in to pole position as the No1 villain it must be
abundantly clear to all involved with this enquiry that DFB’s governance was
inadequate. Its farmer council was impotent with most of them dealing with a
multi million pound business which they did not understand, was way beyond
their intellectual ability although many did and perhaps still do believe they
had the ability. DFB’s governance failed spectacularly, the people charged with
the governance were out of their depth and they all failed to take positive
action to correct the problems and deal with senior management failings.
Concerns over the performance and motives of the executives were raised and alarm bells were ringing and flashing yet the council turned a blind eye. Yates admitted he had been alerted but along with his council he chose to take no action.
Let’s hope history can never be repeated.
Magic Malcolm steps in to the
witness box (5th February 2010)
3pm Wednesday next 10th February
will see former DFB CEO Malcolm Smith who was in place when DFB acquired ACC,
give evidence to the Committee in what we all hope will be the final session.
He is sure to give an honest opinion and has
never covered up the fact he had serious concerns whilst he was CEO. Those
concerns could be disclosed as the final chapters are written in this very
tragic story.
First Milk Chairman by-passes
local representatives with new move (5th February 2010)
First Milk’s Chairman Bill Mustoe has thrown down a challenge to each of
the co-op’s 2,600 members to step forward or put forward for consideration
as suitable board candidates anyone with
broad based experience and a proven commercial track record.
Currently the co-op has 6 farmer directors, which Mustoe
plans to reduce to 3 with those departing to be replaced by 3
directors with a broader experience than perhaps just dairy farming. This
will not be a case of whose face does or does not fit with First Milk’s 26
local representatives group, which could have been a hurdle some candidates
felt was insurmountable and not worth trying to jump.
Mustoe clearly wants a new forward thinking dynamic
board and personally wants to view the details of the applicants who feel they
tick the boxes. It’s a move which will put a few noses out of joint but
one which cannot be faulted only by those who resist change for the sake of
it. Suggested members names
should be emailed to billmustoe@firstmilk.co.uk by 28th
February 2010.
£10m plus milk price fixing fines
claim from Morrisons (5th February 2010)
The
former Chariman of Safeways, David Webster, who scooped almost £2m when the
takeover by Morrisons was concluded is the leading figure of 11 former Safeways
staff from whom Morrisons are seeking to recover in excess of £10m which
Morrisons paid to the governments coffers following the milk price fixing
fines. Let’s hope they have not spent
their windfall gains (source
milkprices.com)
First Milk disaster fund
kicks in (5th February 2010)
Co-op members who failed to have milk collected during January’s cold
spell will receive compensation for lost milk at the same price as the
other milk they sold during January. Those who had insurance are expected
to claim from their insurers and not from The First Milk Fund however we would
not be surprised if one or more of those affected didn’t explore the
possibility of double claiming having no conscience or morals. There is
sure to be one leech and if you spot it please let us know
their name and location.
This is a one-off and going forward members should take out their own
insurance cover for the effects of adverse weather.
No price increase from Arla (5th February 2010)
Arla
have now confirmed producer prices will remain static for February – In
addition it has dumped its trough incentive scheme which for many will equate
to a price cut.
Generic milk advertising at
live rugby league (5th February 2010)
Full marks to The Dairy Council for securing pitch side banner advertising space at 12
rugby super league games, which will be televised. The slogan will be
“Milk Pass It On” and a copy of the banner is attached (only to email
recipients). Keep your eyes peeled for the advertisements.
NFU Farmer Representative Summit apology (5th
February 2010)
Apologies to a number of
milk purchasers who contacted us following last weeks news item news
highlighting the NFU’s Milk Contracts Summit on the 18th February
2010 and our threat to place any non-attending farmer representatives on the
naughty step. The invitations have supposedly been sent by the NFU
direct to 17 milk buyers however a number of those on the invite list contacted
us to request a copy of the invitation claiming they never received an original
copy.
Under the circumstances we have withdrawn our threat to place any non attenders on the naughty step.
No Arla milk price increase from 1st
February? (29th January 2010)
No
news on whether AFMP have succeeded in negotiating a milk price increase (or
resisted calls for a decrease!) from 1st February but our money is
on the Arla price is unlikely to alter with a stand on prevailing.
There
will be lots of excuses / reasons why no increase can be paid, including recent
falls in both the Fonterra and Northern Ireland milk auctions, the fall in AMPE
as well as the fact it was always certain that cream prices would fall in
January, as they have done. In its recent trading report Wisemans quote Dairy
Co’s bulk cream figures having peaked in October at £1700 tonne. They are now
down 33% to £1130 this month.
Dairy Crest price cut(29th
January 2010)
As
a result of falling bulk cream prices Dairy Crest will not be paying any
trading bonus as paid in November (0.2ppl) and December (0.25ppl). To most DCD
farmers this will be taken as a price cut.
Old habits die hard as Sainsburys
turn to Arla for liquid milk (29th January 2010)
The
outcome of the Sainsburys liquid supply contracts to run from October 1st
2010 were announced yesterday, the results of which should have farmers and the
NFU asking questions.
Sainsburys
have enroled Arla to process milk for 70 stores joining its existing processors
Dairy Crest, Wisemans with Grahams (Scottish Organic).
In
a press release Sainsburys claim “At the heart of this re-structure was the
drive to ensure farmers get the best possible deal”. The reality is Sainsburys
have introduced a third processor and at the heart of this scheme will not be
the deal for farmers but the deal Arla have put to Sainsburys, which is no
doubt similar to the deal the Danes put to Tesco when they took an increased
share of their processing from Wisemans last year.
Wisemans
have maintained their business with Sainsburys and will require additional
Sainsburys dedicated farmers. Meanwhile Dairy Crest have lost out, presumably
to aggressive Danish tendering. We all know there is only one incentive which
prompts a major retailer to shift business from one supplier to another. It has
nothing to do with Sainsburys store expansion programme which could easily have
been accommodated by Dairy Crest & Wisemans.
The
big question for farmers and the likes of the NFU is will Sainsburys
introduction of Arla exert downward pressure on ex farmgate milk prices?
NFU Dairy Farmer Representative
Summit Call – Will your representative be dubbed a villain?
(29th January 2010)
Thursday
18th February the Chesford
Grange Hotel, Stoneleigh is the date and venue for Gywn Jones and his Dairy
Board Summit, which is by invitation only to farmer directors, council members,
regional and district chairman and forum members involved in the decision
making of the
If
those claiming to represent grass roots dairy farmers cannot be bothered to go
and listen they should resign. Don’t
expect processors and retailers to be banging the door down wanting to vary
existing contract terms on your behalf.
In
general farmers urgently need to take a more active role and interest in the
contractual terms they have signed. On a
European level contracts are extremely important because, come 1st
April 2015, no less than 27 member states will have no quota restrictions and
each will be able to produce as much milk as they wish.
As
things stand a favourite option is the idea thaat
For
most UK dairy farmers, post DFB’s demise, the day has gone when you could
tender your resignation in protest to your milk purchaser expecting that a
month, a week or even a few days before it expires you can simply call your
existing buyer expecting to be able to rescind so they continue to collect your
milk. In some cases farmers have tried
their hand and not only failed to find a better paying purchaser, but in some
instances it’s a case of not even being able to find another buyer in the area
who is willing to take the milk. The
lessons are tough and some buyers are quick to accept resignations from
unpopular rebels.
NFU Dairy Board problem imminent (29th
January 2010)
This
contracts campaign has been NFU Dairy Board Chairman Gwyn Jones’ baby for several
years now and this conference will be his last throw of the dice before he
stands down as Chairman as he bids to become either Deputy or Vice President of
the NFU. Failure to secure one of these posts will see Jones slip off the NFU
ladder down a big snake as he exits the organisation’s hierarchy.
That
leaves one very important question – who is in a position to fill Jones’ boots
as Dairy Board Chairman? Certainly there
are no automatic existing members of the NFU’s Dairy Board who have come to the
forefront with the standing, profile, respect authority and drive
required. The end result may necessitate
the NFU parachuting in a replacement at short notice during March. It’s a problem which must be addressed.
Co-op plans for dedicated milk
supply are nothing new (29th January 2010)
It
would appear a number of people, particularly the Co-op, were surprised at this
week’s NFU press release pointing to the co-op being committed to establishing
a dedicated milk supply.
There
is certainly nothing new in the Co-op’s position on this score, having
previously declared they intend to go down the dedicated route, however, with
the fallout of DFB, together with the execution of the biggest and most
complicated merger (Co-op and Somerfield) seen in British retailing, progress
has been slow.
It
is also true that the Co-op are extremely sensitive to the TV crew recording of
protesting farmers outside their premises last year and the negative press they
narrowly missed as a result of the fallout from the collapse of DFB.
On
the TV recording all eyes are fixed on the future BBC screening of Alex Riley’s
milk feature in his programme “
On
balance it is doubtful the NFU’s recent meeting will accelerate the Co-op’s
speed of progress but during the next few weeks we can expect more press
releases involving election candidates who will work on the rule that if it
moves jump on it and claim it.
£400,000 bonus from Wisemans (29th
January 2010)
Robert
Wiseman Dairies have recognised the “true grit” shown by 3,500 employees during
the January cold snap with a £100 per worker bonus, which represents an
investment of around £400,000 including National Insurance contributions.
Great
news for the dedicated workers but along with the rest of the UK milk buyers
there has been little, if any, public recognition to all the dairy farmers who
kept farm roads open and helped tankers get on and off farms.
Co-op plans for dedicated milk
supply are nothing now (26th January 2010)
It
would appear a number of people, particularly the Co-op, were surprised at this
weeks NFU press release pointing to the Co-op being committed to establishing a
dedicated milk supply.
There
is certainly nothing now in the Co-ops position on this front who have
previously declared their position in so far as they intend to go down the
dedicated route but with the fallout of DFB together with possibly the biggest
and certainly the most complicated merger seen in British retailing, progress
has been slow. However it is true that the Co-op were extremely sensitive to
the TV crew recording of protesting farmers outside their premises last year
and the negative press they narrowly missed as a result of the fallout from the
collapse of DFB.
We
doubt the NFU’s meeting will accelerate the Co-ops speed of progress but during
the next few weeks we can expect more press releases involving election
candidates who will work on the rule that if it moves jump on it and claim it.
Milk Auction prices crash back by
13% to 24ppl (22nd January 2010)
Thursday
saw 38million litres of one month milk auctioned for only 24.05ppl down by
3.67ppl on last months average of 27.72ppl. Twelve months earlier the
EFRA enquiry in to DFB calls Smith
& Yates (22nd January 2010)
At
last two of the people we believe will be star attractions giving oral evidence
in front of the EFRA committee, over the collapse of DFB have been called. On
Wednesday 3rd February Stephen Yates will be called along with First
Milk whilst one week later Malcolm Smith, former CEO of DFB will give evidence
on Wednesday 10th February.
Is Arlas M25 Super Dairy a ruse and
fairytale? (22nd January 2010)
Back
in November Arlas announcements to build a 1 billion litre super dairy near to
At
the time Ian suggested this was an “early warming alert to all retailers that
once the dairy was built they would be out hunting for new business”.
However
Arla’s 2010 budget and ambitions paper for 2010 states it has doubled its
investment in increasing capacity to that spent in 2009 on projects like the
completion of expansion at Stourton. But no mention whatsoever of any plans to
invest in a site for the new Super Dairy which for a site in that location will
be a tasty figure.
So
will this super Dairy be built or will a more modest dairy be built at some
distant date in the future?
Medina purchases former DFB dairy at
Blaydon (22nd January 2010)
Whilst
it is rumoured
Allocation of £25million to
More
than two months after the commission received approval for its Euro 300million
Dairy Aid package and DEFRA is just going out to consultation as to how the
industry feels
The
DEFRA consultation in
The
two options up for grabs focus on production in a twelve month period between
October 2008 – September 2009 neither of which will be butterfat adjusted.
Option
A - A payment to producers of 0.2ppl
on all production in the 12 month period
Option B - A slightly more complicated option of a higher payment of
0.5ppl on the first 100,000 litres of production plus an additional 0.15ppl or
thereabouts on production above 100,000 litres.
Option A is the same payment per litre
to all producers.
Option B is aimed at paying smaller
produces a greater share of the pot.
A typical 1 million litre producer is
estimated to receive £2,000 under option A and £1,850 under option B.
1ppl Barbers cheese
producers price increase - from January 1st (15th January 2010)
Standard litre price will be 24.15ppl
0.25ppl First Milk producer
price increase – from February 1st (15th
January 2010)
Standard litre price will be 21.65ppl
Another blow with a HMRC decision
which will cost DFOB suppliers millions (15th January 2010)
HM
Revenue and Customs have finally issued their guidance relating to the tax
treatment of the losses sustained by dairy farmers supplying DFOB.
Unfortunately for most the news is grim. The outcome is best summarised in the
words of Dodd & Co Chartered Accountants as follows.
“Farmers
have been awaiting the Revenues view on the treatment of their losses and the
guidance issued today will come as a blow to them. For those ex DFOB members
who held loan stock there will be no losses as the loans were Qualifying
Corporate Bonds, on which losses are not taxable. For current members and some
who have recently left the news is more disappointing. Capital accounts which
would have qualified for capital gains tax relief under the loans to traders rules,
were converted to shares in the debt for equity swap on 27th March.
The outcome of this is that the Revenue are seeking to disallow the loss on the
shares, and as the loan was deemed to be repaid in full, no loss accrues on the
loan.’
The
effect of this is that tax relief, which might have returned the £10 million to
suffering DFB members has been refused by those nice people at HMRC. Whilst the
rules covering companies will allow some relief for those trading through a
company, the majority of members would have been sole traders and partnerships,
who will lose the relief. Given the scale of the losses it is not inconceivable
that this position will be challenged.” – Watch this space.
For
further details see http://www.hmrc.gov.uk/briefs/cgt/brief0110.htm
for further information contact Rob Hitch on 01228 530913 or rob@doddaccountants.co.uk
November DEFRA average farmgate milk
price down almost 10% (15th January 2010)
The
November average price stands at 24.5ppl compared to 27.1ppl 12 months
earlier.This represents a 9.6% reduction (- 2.6ppl)
December production was off the pace
(15th January 2010)
Provisional
figures from the RPA for
More chillie spice added to NFU
elections (15th January 2010)
Less
than six weeks from the hotly contested NFU elections things are really warming
up particularly in the battle for the position of Deputy President which is
almost certain to lead to the position of President in 2 years time when Peter
Kendall retires or someone contests Derek Meads Tenure.
Paul
Temple, who resigned as Vice President shortly after last year elections,
continues to play a mean and determined hand of cards and many if not most feel
he is now nudging ahead of his rival candidates Gwyn Jones, Thomas Binns and
current Deputy Meurig Raymond.
These
elections are sure to hold many more twists,
turns and broken dreams before they are finished.
0.25ppl First Milk producer price
increase – Operative from February 1st (13th
January 2010)
This
is the first milk price to be announced in 2010 and the press release points to
its source as the efforts post the appointment of new Chairman Bill Mustoe to
ensure the business cuts costs and increases margins. First Milks new standard
litre price will be 21.65ppl
7% drop in World Milk Auction Prices
(9th January 2010)
The First Fonterra World Milk Commodity Auction of 2010 saw WMP prices ease by 7% to average $3,309 per tonne compared to $ 3560 last month, which shows a drop of $251 per tonne.
Fingers Crossed for Future of Claymore Dairies(9th
January 2010)
Arla Foods have struck a deal the result of which is that, from February 1st, they will no longer hold their 51% share in the North of Scotland Claymore Dairies liquid processing operation , which they acquired in 1998.
Arla and North Milk Co op have sold out the factory to a Management Buyout (MBO) team for an undisclosed sum, and as part of the deal Arla will transfer part of its remaining retailer milk volume from the North of Scotland factory to its Lockerbie site as well as open a milk distribution depot in Dundee to ensure continuity of supply service to its Highlands based retail clients. In addition an estimated 65 staff currently at the Nairn factory will be made redundant
The small number of high output producers supplying the factory have been offered a supply contract which sees Arla and Claymore Dairies purchasing their milk. However it is understood the contract is limited to a maximum of two years from the 1st February, and another twist in the deal is producers will face a transport deduction in year two to reflect the cost of hauling the milk on the 500 mile round trip from Nairn to Lockerbie. This will be crippling and unsustainable to the farmers.
From Arla’ s point of view this looks to be a very shrewd move allowing them to offload a factory which, whilst in the financial year 2008 made its first pre tax profit in 8 years amounting to £91,000, comes on the back of seven bad years where the factory amassed losses of almost £13m.
Head of the MBO and
current operations director at the factory,Ian Larg, commented "we believe
there is a strong appeal in the area for locally produced milk". The truth
is if this factory is to be profitable and sustainable for farmers and the
management they need to successfully and quickly develop a Scottish equivalent
of
So fingers crossed they succeed in developing profitable markets.
Wiseman sets the record straight
over milk import concerns(9th January 2010)
A
surprise letter from Bridgwater MP, Ian-Liddell-Grainger to Wiseman’s suggested
the company was processing foreign milk, as reported to the MP by several local
farmers. As a result Wisemans were quick
to neutralise yet another rural myth and issued a press release in response to
the letter re-affirming the company’s policy that it only processes British
milk through all of its GB factories.
The
source of this naive rumour is highly likely to be farmers attending Sedgemoor
Livestock Market, which is next door to Wisemans Bridgewater factory, with
farmers having seen foreign lorries and put two and two together and arrived at
5.
It reminds Ian of the time when Manchester United and snooker player Steve Davies were reported to have purchased heaps of milk quota years ago, which was perhaps the most famous rural myth which, embarrassingly for EFRA, was referred to in an EFRA investigation into the milk quota market in the 1990’s.
The reality is Wiseman’s produce around 90 million litres of cream annually, the majority of which they have no immediate home for and exports of cream have always been a major part of the company’s marketing plan.
Whilst
it is useful to clear up the position, if the accusations were made by dairy
farmers, as opposed to non-dairy farmers with absolutely no idea of the real
market, then Wisemans and all involved in the industry still have a lot of work
to do in educating farmers as to what happens beyond the farm gate. Surely no dairy farmer could believe that in
today's market, with the cost of transport, Wisemans could import liquid milk
into the
Moody dominates DFB EFRA committee
meeting(9th January 2010)
Ian has been away this week,
but has plenty of commentary on this week’s hearing on which Michael Jack and
his Committee allowed Philip Moody to dominate and control proceedings and pull
the wool over the Committee’s eyes. More to follow next week, though.
Meanwhile, Ian waits to hear when Magic Malcolm will be called to give his
evidence, and perhaps counter what Moody had to say.
The
best outcome will be for both Magic Malcolm and Stephen Yates to be called to
give evidence on the same day and for both to be awarded parliamentary
immunity, which effectively means neither can be prosecuted for statements made
or any slanderous comments. This could give Moody and Knight, as well as some
of the others involved, sleeping problems but has the potential to once and for
all expose the truth about the wrong doings at the top of DFB. Hopefully this
will ensure some faces either never appear again in
Bovine TB film on YouTube worth a look(9th
January 2010)
Check out this one minute
trailer of the film by clicking on this link http://www.youtube.com/watch?v=IS2L864aVSw
The producer has recently
completed shooting a short film 'Bovine' which focuses on a farmers struggle
against TB. Watch this space for details of the release date.
Milk Link invest £350,000 in
Lockerbie(9th January 2010)
Milk
Link is to invest to upgrade its butter processing facilities at
Lockerbie, which currently sees around 8,000 tonnes of butter produced by the
factory annually.
3rd March 2010
will be
Magic Malcolm Smith will
not give evidence today.Will he be granted Immunity? (6th January 2010)
The EFRA investigation into exactly what went wrong at DFB has many twists and turns.
Last week,see story below, we suggested that the next oral evidence involving Knight,Moody and Cooksey on the 6th January
had been seriously spiced up with the inclusion of former DFB Chief Executive Malcolm Smith but it was a pity Smith could not speak after the three Musketeers.
Well either EFRA have been persuaded that is a good tactical move or they have bottled out and ditched the idea of Smith giving evidence because Smith has been dropped from today's schedule.
If EFRA have decided not to call Smith then shame on them and strong representations should be made because it will smack of the old boys network kicking in with certain named people pulling in favours in an attempt to Gag Smith who was ousted from DFB by a Cuckoo called Knight
If Smith is to appear at a later date then full marks to EFRA because ,assuming Knight,Cooksey and Moody turn up today, Smith will have the advantage of hearing exactly what they state and in true Northern style will be able to amplify his comments to the EFRA committee.
The best outcome will be for both Magic Malcolm and Stephen Yates to be called to give evidence on the same day and for both to be awarded Parliamentary Immunity which effectively means neither can be prosecuted for statements made or any slanderous comments.This would give one or two of the three giving evidence later today sleeping problems but has the potential to once and for all expose the truth which a number of people know and expose the wrong doings at the Top of DFB and hopefully ensure some faces never appear again in UK Agriculture or at least have no possible involvement in a co op
1ppl milk price to rise to Barbers
Cheese suppliers – from 1st
January (24th December 2009)
Milk auction price steadies at
27.72ppl (24th December 2009)
This
week’s United Dairy Farmer (UDF) milk auction in
Twelve
months earlier the auction saw 30million litres average a soul destroying
16.63ppl.
Farmers
supplying UDF co-op are now seeing the fruits of the recent auction results
filtering into their bank accounts.
Hallejlujah as Knight, Moody and
Cooksey are called to give evidence (24th December 2009)
Christmas
news does not come much better in the dairy industry than the revelation that
the pressure put on the EFRA Parliamentary Committee enquiry into the collapse
of DFB has resulted in it opening its doors again for oral evidence only this
time it will involve the key players.
At
last EFRA have called most of the key people into the dock and on January 6th
Rob (Garfield) Knight (former Chairman), Philip (fingers in lots of pies) Moody
(former Director and so-called leading corporate Finance Director), Andrew
Cooksey (former CEO) and Malcolm Smith (CEO until 2003) will all step forward
to give evidence. At least they had
better turn up and not pull a sick note out!
The
U-turn by Michael Jack and his EFRA team is partially attributable to strong
words from the NFU, in particular Gwyn Jones as well as the fact Mr Jack is
aware of press comments from so-called celebrity journalists, calling into
question how effective EFRA enquiries into the dairy industry are.
It
is indisputable that the EFRA Committee failed miserably in its enquiry into
where the retail margins on liquid milk went and the oral evidence to date into
the collapse of DFB has been largely irrelevant with irritating performances,
particularly from the likes of Jim Fitzpatrick and John Granchester. The hearings have been poor and frankly a
joke involving the wrong people. If the
EFRA enquiry into the collapse of DFB had closed without calling Knight and
Moody they were heading for an award for a bunch of jokers and the laughing
stock of Parliament. As it is they now
have a golden opportunity to redeem themselves and to get stuck in with some
sharpened teeth as they interrogate this motley crew, most of whom were in the
room when key decisions were made.
So what needs to be asked? (24th
December 2009)
No
one will go to jail or The Tower of London but farmers who invested in DFB have
been badly let down and are due some answers and detail.
All
that is required is for the EFRA Committee to extract some honest answers as to
what went wrong to ensure history cannot be repeated.
As
a minimum questions must include:
Who
made the decisions and why?
How
much by way of bonus, golden handshake or hush money did Cooksey, Knight and
Moody each receive when they left at a time when the DFB ship was sinking fast?
Let’s
know the truth as to the salaries and bonuses each received and who sanctioned
them?
Did
Philip Moody feel he his and firm, Smith Williamson, had a conflict of
interest?
What
is the real truth behind the ACC deal?
Finally,
question Philip Moody on his track record of senior involvement in other co-operative
ventures and EFFP?
Milky Bar Kid viewings could
outstrip Tiger Woods’ confessions(24th December 2009)
The
real spice is the calling up of former CEO Malcolm Smith (The Milky Bar Kid)
and the real tragedy is that the Three Muskateers (Knight, Moody & Cooksey)
get to hear Smith’s evidence before they are called up. A reversal of batting orderv would allow
outspoken northerner to comment on the accuracy of the oral evidence given by
the deadly trio. As it is the 4 man line
up for the 6th will attract more viewings than would Tiger Woods’
confessing his inappropriate relationships and the crowds could mirror scenes
outside the Los Angeles Medical Centre when Michael Jackson was pronounced dead
as people started to sing and dance.
Further oral evidence in the
pipeline(24th December 2009)
Although
it is yet to be officially confirmed it is understood that during the week
commencing 11th January 2010, Stephen Yates, Milk Link and First
Milk will be called to give evidence and possibly a few old faces that were
around at the time of the ACC acquisition.
That just leaves EFRA to call John Loftus, Steve Ellwood and Mark
Strickland following which they can then sit back and say we have left no stone
unturned. Come on EFRA just three more
invitations to send out!
The
chickens are heading towards home to roost!
That is a result.
MODERN DAY CHRISTMAS –
Thoughts for you to consider
|
Notes on commodity trading (source BOCM) (18th December 2009)
The
big play of the day is £:$ exchange rate which is nearly 3 cents lower than
late yesterday. Each Cent lost adds nearly £2/t to the
Oil
world estimate the southern hemisphere will produce 123m tonnes of soya this
time round against 97m tonnes last.
0.25ppl price increase for Dairy
Crest suppliers(18th December 2009)
Last
months trading bonus of 0.2ppl paid to Dairy Crests liquid contract suppliers
has increased to 0.25ppl for December. Both payments represent a share of
higher returns received by the company from cream sales.
Wiseman ends First Milks PR year on
a positive note(18th December 2009)
First
milk has ended, we hope, the year with the positive news of its Wiseman Dairies
“Supplier of the Year” award which recognises professionalism, responsiveness
and capability. First Milk claim the award is testament to the hard work,
flexibility and dedication of our sales team.
First
Milk will be hoping next years award for responsiveness, capability, hard work
and dedication goes to Executive Chairman Bill Mustoe then they will be heading
onwards and upwards.
Double Award Celebration for Belton
Cheese(18th December 2009)
Family
run
Beltons
second award was for Family Business of the Year. The farm has been making
cheese since the 1800’s.
Heroes of the Week
The Dairy Council(18th
December 2009)
Top marks to all involved at the Dairy Council for securing
2.2million Euros for a three year campaign to promote the drinking of liquid
milk by young people in
The “Milk in Action Campaign” will start in April 2010 and will
hopefully link in with milk consumption in sport message as we run up to the
2012 Olympics.
At dairy farmer level there are a number who would like to see
more support for milk promotion especially from their levy as was highlighted
by Dairy Farmer columnist and First Milk Director Roger Evans at this year’s
Dairy UK Annual Conference.
Milk
production is slowly increasing (11th December 2009)
It would appear a month on
month decline in
November production figures
show a non butterfat adjusted production of 986.4million litres, which compared
to production in November 2008 is an increase of 3.8million litres. This is the
third consecutive month the
DEFRA October farm gate milk price down almost 3ppl –
again (11th December
2009)
The October average milk price was 24.43ppl, which as was the case in
September was almost 3ppl (2.95ppl) behind the price recorded 12 months earlier
representing a whopping 11% (2.23ppl) drop.
The GB average for the month was 24.69ppl where as the average paid in
French dairy meeting excludes
In years gone by the
The French were preparing their battle strategy to defend the CAP, in
particular for the continuation of quotas beyond 31st March
2015. Several believe the French
minister has spotted a chink in the European armour in the change over between
Commissioner Fischer Boel and new Commissioner Dacian Ciolos and this could
present an opportunity to take command of the CAP agenda and its direction of
travel. The European Milk Board welcomed the outcome of the meeting reinforcing
their belief that there must be “permanent flexible supply control for
producers benefit” which in laymans terms translates to milk quotas.
Threat to close down Arla’s
There is growing evidence of a Lancashire originated plot to close down
Arla’s
Farmers For Action have received a request to put their troops forward
and have agreed to only consider support if there is clear evidence that Arla
Milk Partnership members are fully behind any protest plan and not hiding
behind big Dave Handley.
If disruption plans go ahead it will certainly be a Christmas of discontent
and will kill Ian’s idea that processors and farmers are much closer to each
other, as protests on cold wet winter nights once again return.
More internal trouble at Arla (11th December 2009)
It could certainly turn out to be a discontented ending to 2009 for Arla
following confirmation from two members of staff that there is a huge ground
swell of discontentment over conditions, the new dairy and remuneration all of
which could “easily result in industrial action.” Protesting farmers and a discontented
workforce will be double trouble for the co-op.
Does it pay to resign your contract? (11th December 2009)
It certainly appears to be the case for some on a standard Arla contract
with news from the inside track that two producers who are on the resignation
list have now been offered Arla/ASDA contracts in a bid to retain them.
First
The Enus bio-ethanol plant in Teeside took in 5,000 tonnes of wheat on
Tuesday as a test run before it ramps up to full production next month at
around 1.2million/tonnes per annum.
Villain of the Week – Arthur
Fearnall AFMP Director (11th
December 2009)
During the week the threat of protests has been a talking point but in
true Arla gagging style one of AFMP’s Directors informed farmers that any ASDA
contracted supplier would have their ASDA premium contract immediately
terminated if they were seen protesting.
Now come on Mr Fearnall let’s get real this is not an ASDA issue
and it is not a Tesco or Morrisons issue all of whom take milk out of your
Leeds factory. Any issue is 100% an Arla
issue and the chances of ASDA or any of the other multiples issuing such an
ultimatum to Arla is zero. It would no
doubt be accurate to state that if any Tesco or ASDA contracted producer were
to be spotted on the front line questions would be asked but any contractual
threats have their roots firmly embedded between AFMP directors and Arla. Given the fact AFMP directors are paid to
represent farmers such veiled threats and comments seem to be at complete odds
with equitable representation.
Heroes of the Week – Dairy
Crest (11th December
2009)
Following our article criticizing backward photographs of dairy farming
on their Countrylife butter website and numerous emails from readers of this
bulletin, which were anonymously forwarded to top brass at Dairy Crest, the
photographs were promptly removed and certain advertising personnel placed on
the naughty step. Another victory for Potter.
World
Auction prices up 95% in 5 months (4th December
2009)
Prices
for WMP sold in the monthly Fonterra auction have almost doubled in the past
five months, coming back from $1829 (July 2009) to hit $3560 this week. During
the same period the tonnage offered by auction has increased by 25% from 20,000
to 25,000 tonnes. Compared to the November results the price increase was a
more modest 3.6% ($123).
In a
joint letter from Hanne Sondergaard and Jonathan Ovens, AFMP farmers have
received confirmation their partnership board have agreed there will be no
Christmas increase in the Partnership’s standard litre price before 1st
February 2010. This is indeed confirmation that negotiations between AFMP and
Arla have not gone well in respect of farmers benefiting from some of the
fruits from the huge gains seen on the world markets, and the recent
chart-topping cream price.
As
the song goes “This town ain’t big enough for the both of us, there’s only Bill
who’s staying in”. New Chairman Bill Mustoe and Chief Executive Peter Humphreys
have agreed a deal which has resulted in the latter parting company from First
Milk. Although Humphreys is scheduled to be around until March his role on a
day to day basis will be minimal, and immediately covered by Mustoe who will
act temporarily as Executive Chairman whilst Humphreys tidies up his garden and
vegetable plot.
The
average
After a
detailed analysis conducted jointly between Dairy Crest and Dairy Crest Direct,
DCD suppliers have been notified of various contract changes, including how the
price they are paid for their milk is calculated, and changes to its
contractual terms. Two new contracts are also available from July 2010,
including the first two year fixed price contract for its “milk and more”
doorstep business. This will offer those not currently on retailer aligned
contracts, who opt for the new contracts, a premium of between 0.25ppl to
0.3ppl above the DC standard litre price.
NFU
trumpet Dairy Crest announcement but is it all sparkling or is their a hidden
price cut? (4th December 2009)
The NFU
have trumpeted the Dairy Crest announcement as “one that would appear to meet
many of the recommendations of the NFU’s template raw milk contract”. Clearly
DC have certainly listened and responded to producers contractual concerns.
Last week
Ian spoke at a conference in
And now a
quick poll re an advertisement for Countrylife butter: click on the link http://www.enjoycountrylife.co.uk/from-farm-to-fridge.php
to
see whether you feel Dairy Crest’s advertising agents are portraying an
accurate image of Dairy Crest Direct farmers. It shows a cow milked by hand
whilst its leg is tied with the milk collected by a tractor and trailer. Click
on the “5-9am” banner for the picture of the cow. Then click on the “later in
the evening” banner for the picture of the tractor and trailer picking up the
milk from the farm. E mail ianpotter@ipaquotas.co.uk with your
views which Ian will forward to Dairy Crest anonymously.
The
This year
marks the 50th anniversary of the Dairy Council’s support for the
Ceremony of British Christmas cheeses held at the Royal Hospital Chelsea and
like other years the event makes you feel very humble, proud to be British,
proud to be involved in the Dairy Industry and frankly makes the hairs stand up
on the back of your neck.
Another month
and another rise for the 38million litres of milk auctioned at this months
United Dairy Farmers milk auction.
A number
of readers contacted us following our mention of the 1ppl price fall from 1st
December for farmers supplying Muller.
On the one hand some farmers are suggesting the price cut is because
Muller are paying an above, local average, milk price and the fact that they
are reported to have a waiting list of farmers wishing to join them, especially
ex-DFB members. Others believe the
December price drop is nothing short of a “stunt” and this December is no
different to any other December faced by Muller. Whichever school Muller suppliers subscribe
to we should point out the 1ppl is set to be re-instated in January. Perhaps
the competition from Nom, who are seeking new outlets, is a key pressure point
the yoghurt maker is battling with.
Arla has
acquired
Dairy
giant Arla has issued a press release confirming that due to improving prices
it is to increase the price it pays its Danish producers by the equivalent of
1.2ppl to a non-organic base equivalent to 28.74ppl. Arla claims the increase is “based on the
positive development in the industrial market, where prices for whole and
skimmed milk powder have risen in recent months.” Arla Foods CEO Peder Tuborgh comments “Our
co-operative owners need a better milk price and there is now an opportunity to
increase the price thanks to the improved situation in global markets.”
Next
Tuesday 1st December will be an industry heavyweight line up of
speakers with NFU President Peter Kendall will be joined by First Milks new
Chairman Bill Mustoe, John Giles from Promar and yours truly Ian “The Agitator”
Potter.
Dairy giant
Arla has issued a press release today confirming that due to improving prices
it is to increase the price it pays its Danish producers by the equivalent of
1.2ppl to a non-organic base equivalent to 27.8ppl. Arla claims the
increase is “based on the positive development in the industrial market, where
prices for whole and skimmed milk powder have risen in recent months.”
Arla Foods CEO Peder Tuborgh comments “Our co-operative owners need a better
milk price and there is now an opportunity to increase the price thanks to the
improved situation in global markets.”
If this had been a backdated price cut Dairy Crest
would have been this week’s villains.
In a surprise move troubled co-op First Milk has today
sold more than 4 million of its shares in Wiseman Dairies representing 5.7% of
the company and 37% of their total stake in Wisemans, which has reduced from
11.3 million shares to 7.16 million, representing a revised 10% stake in
Wisemans. Whilst the deal is undoubtedly
good business having acquired the shares 5 years ago at £2.50 and selling them
today at the discounted price of £4.50 it will be a worrying move for all
involved with the co-op.
Arla have rocketed to the front line of
positive dairy industry news stories for 2009 with this week’s announcement
that it intends to build a 1 billion litre liquid super dairy close to the M25
and
Whilst Dairy Crest will undoubtedly be
contemplating the way forward for their liquid business they can at least
retrieve one of their missing milk trolleys.
The trolleys cost around £100 each and the front trolley in the
photograph circulated by Arla accompanying its announcement this week was
unfortunately and embarrassingly a Dairy Crest trolley. Let’s hope the budget for the new plant
includes a provision for new Arla trolleys.
Arla’s famous Cravendale milk is without doubt the
highest priced milk in the world if you buy it from Centre Parcs. One eagle-eyed reader forwarded a photo of
Cravendale Purfiltre Skimmed 2 litre priced up at £945 per litre. At that rate the new plant will be paid for
in days!!
1. Profits
at Wisemans up 62%
Wisemans’ half year results show a 62.4% increase in
operating profit to £21.6m (£13.3m in 2008). There was an 11% increase in sales
volumes to 851m litres and operating profit per litre stands at a healthy
2.54ppl.
In addition its net debt reduced from £50.2m in 2008
to a current £26.7m. Its share price increased from £4.60 to hit a 52 week high
of £4.91.8 yesterday.
Dairy Crest’s half year results were ahead of
expectations showing a 20% increase in its profit (before tax) to £34m (£28.4m
in 2008).
In addition its net debt reduced by £110m in the
past 12 months down to £380.4m the lowest level seen since 2006. Like Milk Link
(see below) Dairy Crest highlight how tough the cheese market has been during
the 6 month period, particularly from an increased volume of imports and retailer
promotions, discounts and bogofs. Its share price fell from £4.07 to around
£3.95 today.
Milk Link should be congratulated for continuing to
follow good practice in producing timely half year results aimed at members, an
idea First Milk and a few others should not shy away from.
Former Dairy UK Chairman and Conservative MP David Curry’s
resignation as Head of the Commons Standards Body after only a few weeks in the
job is a lucky escape for Dairy UK, who sacked Curry a little over 12 months
ago at a time when he appeared to be squeaky clean.
Only days after Morrisons Chief Executive Marc
Bolland gave a fascinating paper at the EFFP ‘Routes out of Recession’
Conference comes news he is to defect to rival supermarket Marks & Spencer,
where he will become CE following on from Sir Stuart Rose. During his 3 years
plus reign at Morrisons, Bolland has made a big difference making Morrisons a
national player and the announcement will leave a significant recruitment
challenge for Morrisons.
Dairy
Crest have increased the price it charges roundsmen for cream by a whopping
25ppl from next Monday (9th), which is more than some of its farmers
receive for their milk and for a product which is effectively a by product of a
liquid processor. Certainly this
increase demonstrates that Dairy Crest have ensured they will reap some
benefits from the boom in cream prices.
World
auction prices up 88% in only 4 months (6th November 2009)
For
the fourth consecutive month the average price recorded at Fonterra’s monthly
dairy product auction has risen. This week’s auction averaged $3,437 up $415
(13.7%) on last month’s auction average of $3,022. This is an increase of $852
(33%) on prices achieved 12 months earlier where the average sale price was
only $2,585.
It
would seem Michael Jack and his EFRA committee have scheduled more sittings for
witnesses to be called to give evidence in to the collapse of DFB.
According
to an article in the latest issue of DIN it is suggested that “substantial
bonuses were paid to several senior DFB executives within weeks of DFB going
into receivership?” In addition, PWC have
allegedly informed former DFB members that payoffs and final salaries paid to
Knight Cooksey etc will “never be disclosed”.
October
production totalled 1,021 billion litres up 6.2 million litres on production
for October 2008.
Ian
attended this weeks EFFP conference which was another gathering of 300 of the
great and the good in the industry. More commentary on the days proceedings
will be given in Ians Dairy Farmer article.
This case is turning out to be an
extraordinary case and a very long and bitter battle.
DFB
EFRA enquiry moves in the right direction (4th
November 2009)
It
would seem Michael Jack and his EFRA committee have scheduled more sittings for
witnesses to be called to give evidence in to the collapse of DFB.
For
the 4th consecutive month the average price recorded at Fonterras
monthly dairy product auction has risen. This weeks auction averaged $3,437 up
$415 (13.7%) on last months auction average of $3,022. This is an increase of
$852 (33%) on prices achieved twelve months earlier where the average sale
price was only $2,585.
It
cannot be said that First Milk shy away from facing its members with bad news
having announced only 24 hours before its AGM and conference a further milk
price cut of 0.65ppl.
However
others involved in the liquid market have failed to pass on any benefit from
the hike in cream prices which Dairy Co claim is worth an additional 1.95ppl
although their method of calculation certainly warrants further scrutiny.
The
October MCVE is up by a further 1ppl on the September value to weigh in at
27.2ppl which is higher than its 27ppl value 12 months ago.
This
is the 9th consecutive monthly increase from a low of 24.55ppl in
January. DairyCo point to the 1ppl coming from increases in butter and whey
whey prices commenting that cheddar prices have remained stable at around
£2,500 tonne.
According
to a report on milkprices.com Tesco have recently completed their cheddar
tender the result of which is costing Tesco an average £300 to £400 tonne more
to the price paid by the retailer 6 months earlier.
AMPE
(The Actual Milk Price Equivalent) has seen its October price rise by a
whopping 3.4ppl to reach 26.4ppl the highest AMPE since August 2008.
“Responding
to the challenge” was the title on First Milks 2009 Annual Report and accounts
and that challenge has fallen firmly at the feet of the Co-ops new Chairman
Bill Mustoe.
Joseph
Heler seems to be a magnet for TV crews and hot on the heels of their TV feature with
the Hairy Bikers comes farming champion, Jimmy Doherty and part 3 of his Food
Factory series, which has been filmed at Heler’s
More
commentary on the presentations given at the Co-ops conference next week and in
Ians Christmas Dairy Farmer article.
What
looks to be the 3rd and final EFRA committee hearing in to the
collapse of DFB took place this week.
The
First Milk Island Creamery on Arran has landed a deal to supply a premium hand
made cheese to M&S under the name of Kilmory Cheddar with the milk coming
from just 3 remaining island dairy farmers.
This
week’s milk auction saw 35 million litres sell for a staggering 28.29ppl
up more than 18% compared to last months average of 23.9ppl (32 million
litres). Milkprices.com report the auction “left many local buyers short of
milk”.
Marianne
Fischer Boel will propose the commissions’s budget surplus of €280m be directly
distributed to all European dairy farmers early in 2010.
<![if !supportLists]><![endif]>If the
Monday’s
meeting of the EU Council of Ministers was another display of dairy solidarity
with around 5,000 dairy farmers with 900 tractors descending on
In
announcing that Bidwells will carry out the company strategy and performance
report looking into seven leading milk processors, DairyCo has felt it necessary
to clear up some inaccuracies.
Lord
John Granchester, former Chairman of DFB appeared before the EFRA Committee on
Wednesday.
Granchester
mischievously failed to correct the Committees lack of knowledge and background
research when they constantly stated he had joined the board of DFB late in the
day when the reality is Granchester was a director from day 1 and played a very
active role (or should have). At one stage the Committee asked if Granchester
had arrived at DFB 9-12 months earlier could he have averted the crisis.
Former
Farmer Direct director Michael Oakes is a late addition to next Wednesdays EFRA
line up having effectively turned himself in for questioning. He will appear alongside
Tesco and Jim Fitzpatrick MP which at first sight is surprising as to why
either have been called to give evidence in preference to the host of others
listed last week who made the decisions. As Jerry Smith stated Tesco had no
part to play in the demise of DFB and “were very supportive”. Local Choice
simply did no work out for either party.
Marianne
Fischer Boel has announced she proposes the surplus €280m from the commissions
budget is directly distributed to all European dairy farmers early in 2010.
<![if !supportLists]><![endif]>If the
First
Milk’s new chairman will be Bill Mustoe who will take over from Richard
Greenhalgh at the co-op’s AGM later this month. Mustoe clearly ticked a number
of boxes with his extensive experience at directorship level, especially in the
frozen, chilled and fresh food business.
The
bid by Robert Shearlaw to become farmer chairman of First Milk appears to be
all over.
The DEFRA average ex-farm gate milk price
paid in August was 23.27ppl, which compared to August 2008 (26.31ppl) was drawn
3.04ppl or 11.5%.
This week saw oral evidence given to the
EFRA committee as part of their investigation into the collapse of DFB with
particular focus on DFB’s accountability and governance and the causes of the
collapse. The aim is to publish some lessons learnt.
http://www.parliamentlive.tv/Main/MeetingDetails.aspx?meetingId=4740
Wednesday’s appearance by Gwyn Jones in front
of the EFRA committee did not go well for him or the NFU, although it has to be
commented that on more than one occasion the NFU’s Hayley Campbell-Gibbons came
to the rescue.
That’s the question Michael Jack, chairman
of the EFRA Committee, asks the witnesses he cross-examined this week.
Fayrefield point to the increasing milk and
cream price as the reason for increasing prices for the second consecutive month.
The latest price increases for butter cream and other products starts
from 2nd November and follows hot on the heels of an 1st
October increase.
Thursday saw the release of the European
Court of Auditors recommendations following their analysis of the EU dairy
industry which clearly sings from the same hymn sheet that the European Milk
Board are singing from.
“With regard to market equilibrium, the Court concludes that milk quotas have effectively limited production, but that their level has proved to be too high for a long period of time, compared to the market’s capacity to absorb the surpluses.”
“The Court recommends that monitoring the development of the milk and milk product market should continue, so that liberalisation of the sector does not lead once again to over-production. Failing this, the Commission’s objective of keeping to a minimum level of regulation, of the safety net type, might rapidly prove impossible to fulfil.”
“As for the objective of stabilising prices, the Court finds that the nominal milk producer price varied little during the 1984-2006 period compared with the period before the introduction of quotas. However, in real terms, the milk producer price has fallen continuously since 1984.”
“The concentration of processing and retailing companies must not reduce milk producers to “price takers”, and must not restrict opportunities for final consumers to benefit fairly from decreases in prices.”
“The Commission and the
Fresh’n’Lo confined to the history
books (16th October 2009)
According to milkprices.com Tesco is set to axe
its Fresh’n’Lo brand in favour of a new 0.75% Creamfields label to be packaged
by Wisemans and interestingly supports the same purple colour seen on Wisemans
1% milk.
For the fourth consecutive month the average price
achieved at the Fonterra monthly dairy product auction rose. This week’s all
products auction average was $3,022 which is a 65% increase on the $1,829
achieved in July (‘09). Twelve months ago the price averaged $2,917 but at that
time prices were heading rapidly south.
September’s production, compared to 12 months
earlier, rose this year. The 2009 production provisionally stands at 992.7m
compared to 973m in September 2008 (+19.7m litres). Cumulative production to 30th
September stands at 6.6227 billion, down only 15.1m litres on the cumulative
figure recorded 12 months earlier. The
last time September production rose compared with the figure 12 months earlier
was in 2003, however, given recent price cuts this increase is highly unlikely
to signal a U-turn in production.
Following
discussions between Arla and AFMP, all ex-DFB producers who now supply Arla
will see their standard litre price increase to 21ppl for September and from 1st
October for a minimum of 2 months the price paid by Arla will match the full
partnership contracted standard litre price.
It is
certainly the week for delivering encouraging news to ex-DFB suppliers with
First Milk offering the majority of the ex-DFB members a full contract from 1st
November. The offer is open to those who
meet First Milk’s volume criteria and is subject to a 0.3ppl capital retention
deduction.
The
European Milk Board claim 5,000 angry dairy farmers with a convoy of more than
1,000 tractors from 8 member states protested outside the building in
Welshman Mansel Raymond failed in his bid for
re-election to the board of First Milk and has effectively been replaced by
Richard Davis from Bedfordshire, who is both a dairy farmer and Vice Chairman
of DairyCo and will be a popular addition to First Milk’s Board having been
absent for only 12 months. To be fair, Mansel has given the position his best
shot during his 8-year reign.
Last night was a gathering of the great and good
involved in British agriculture as 1,100 people wined, dined and danced the
night away at the Farmers Weekly Awards in
ASDA are
offering 400g blocks of Dairy Crest’s
• 1.5ppl Barbours Cheese
• 1.5ppl price drop for suppliers to
Joseph Heler cheese - Taking their standard litre price down to
21.75ppl.
• 0.7ppl price drop for suppliers to
Meadow Foods
• 0.5ppl price drop for suppliers to
Wensleydale creamery - taking their standard litre
price down to 23.45ppl.
• 0.06ppl drop for Tesco Suppliers – takes their price to a healthy 27.37ppl
Wiseman
stand on/no change
Arla
stand on/no change
Dairy
Crest (liquid & cheese) stand on/no change
First
milk stand on/no change
Wyke
Farms Stand/on/no change
Milk
Link (manufacture & liquid) stand on/no change
The big surprise is that liquid supplying dairy
farmers, particularly Arla suppliers and,
to a certain extent Dairy Crest, are not screaming from the roof tops
and a “stand on price” should have been an increase.
Arla have issued a press release explaining how
trials on AFMP farms show how members could benefit from free hot water, which
could cut electricity bills by £1,000 per year.
Whilst Tesco and the likes of Wiseman are leading
the liquid milk Premiership table others are appearing on the warning
radars. This week we have seen a
Those on the receiving end of poor milk prices who
have the option to sell to the premiership of liquid milk processors, whos
production profile suits, are on the move as the peasants revolt.
He’s hoping to knock-out all the other contenders
for the job of First Milk chairman in the coming weeks. But at Ayr market
this week former vice chairman and new chairman wannabee Robbie Shearlaw was
not so much a big hit, but on the receiving end of one. He was apparently
floored by a contractor, or more probably by a man fulfilling a
contract! Names of suspects on a postcard please. Robert is reported to be rethinking his
election line “Trust me to fight your corner” and is believed to be “taking it
all on the chin”. Which, of course, he did in the first place. The police were called, but it is not known
what action is being taken, and against whom.
Three First Milk board positions will be decided
next week with the position of Vice Chairman up for grabs, following Robert
Shearlaw’s resignation, as well as Mansel Raymond and Mike Gorton who are up
for re-election.
Last Weeks brief analysis of First Milks financial
results excluded comments from Ian and his forensic friend.
No.1 Peter
Humphries (CE) remuneration was down 20% to £316k
Jim
Maguire (FD) remuneration was down 12% to £211k
Robert
Shearlaw (Ex Vice Chairman) remuneration package up 60% to £56k
No.2 Employee
numbers down 8.5% from 801 to 732
No.3 Pension
deficit up from £2.5m to £8.8m
No.4 Once
again FM shows the correct way to deal with member levy payments having
correctly put them through their P & L against costs of sales. This has to
be the directly the likes of Milk Link must go if they wish to be considered on
a like for like basis with FM and along side the PLCs. By not putting its
members levy through its P & L Milk Links 31st March 2009
results showed sales under stated by £4.74m turning its figures in to a net
loss of £4.25m.
In an interview for the BBC, David Wilkinson, former
Vice Chairman of DFB rejected claims that farmers were misled over the state of
the business. However, he did admit too much may have been paid for the CTRG
business but then claimed they were competitive bids.
15.10.08 – (Post a resignation date) – Its board
announced no payment to be made
October 2007 – Potter analyses DFB’s accounts
cutting through the spin and describes them as “in a perilous state”.
November 2007 – Stephen Yates, with the blessing of
the board and some council members employ an external spin doctor who
parachutes Alastair Clark claiming to be an independent corporate finance dairy
specialist (who no one had even heard of before or since). He declared DFB’s
accounts were great and the board and Yates sold this to members as an
independent analysis by which time the lunatics really had taken over the DFB
asylum.
Although a full council meeting is scheduled for the
19th & 20th October 2009, numerous member states have
succeeded in calling for an emergency dairy meeting next Monday (5th). It appears 18 out of the 27 member states are
pushing for an increase in intervention prices and refunds, together with
action on quota literages.
At the British Cheese Awards last week, the
equivalent of The Cheese Oscars, Shropshire based family run Belton Cheese
scooped 12 medals and the trophy for the Best British Cheese Export beating 47
other award winning cheeses. At the
awards, Milk Link took the trophy for the best Welsh cheese clocking up 25
awards.
Considering the pickle the British Cheese Industry
appears to be in (see above) the declaration to Ian today that this week was
officially British Cheese week left him speechless (and that’s a unique
achievement). Whoever was supporting and
promoting this event certainly failed to inform most, if not all dairy farmers
and the agricultural press.
In contrast to the lack of publicity for British
Cheese week there was plenty of publicity for Wednesday’s World School Milk Day,
which involved more than 30 countries.
Cool Milk, leading
The 2008 rate was €1 = 0.79030 so this is a 15%
improvement