Dairy Industry news and features

This page was last updated at 12th December 2017 (Press your refresh/reload button for the latest information)

 

 

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

  

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Note, all standard litre prices are those quoted by www.milkprices.com and are based on the following:

The liquid standard litre 4% bf, 3.3% protein, 30,000/ml Bactoscans, 200,000/ml SCC, 1 million litres a year on EODC but before seasonality, monthly profile payments, balancing, B price additions, capital retentions or annual incentive schemes.

The manufacturing standard litre is to exactly the same specification with the exception of 4.2%bf and 3.4% protein.

 

Jonathan Ovens is No. 1 target for the Arla assassins   (11th December 2017)

Over the weekend rumours of a plot to execute current UKAF Chairman Jonathan Ovens have gathered pace and it certainly appears he is the number 1 target for what looks at the moment to be a kangaroo court with fellow UKAF board member Johnny Russell as chief prosecutor, judge, executor and undertaker all in one.

Speculation is rife with what appears to resemble a bloodful coup (AKA assassination) with suggestions that six of the ten current UKAF board members have had numerous secret meetings plotting to oust Ovens both as Chairman and as a supplying member of milk to Arla with at least two others potentially on the radar for similar treatment.

It is a fact, Ake Hantoft announced his intention to retire as Chairman of Arla Foods AMBA from May 2019 only a few days ago and this looks on the surface to have accelerated moves to oust Ovens to ensure he is completely out of the picture in terms of any succession planning to follow Hantoft.

It’s certainly explosive politics for the Arla co-op to be involved with and it’s not looking like this is going to end well for anyone in the battle for the position of top dog at Arla.

For sure this story is sure to run and run and run. We will post statements in response from the individuals concerned and or Arla as soon as they are received. 

1.5ppl milk price reduction for Glanbia Cheese suppliers – from 1st January   (8th January 2017)

This is to date the only milk for cheese January milk price reduction and reduces producers standard manufacturing litre price to 29.5ppl and based on a standard liquid litre the price is only 28.5ppl.

 

This price reduction has caused a stir with two Glanbia farmers contacting Ian declaring they are quitting and not prepared to sweat out another painful drop.

 

1.25ppl milk price reduction for Meadow Foods suppliers – from 1st January   (8th January 2017)

This takes producers standard liquid litre price down to 29.75ppl (www.milkprices.com)    

 

0.11ppl milk reduction for Sainsbury’s contracted farmers   (8th January 2017)

Farmer members of the SDDG will see a small 0.11ppl reduction from 1st January based on its cost tracker.

 

The 1st January standard liquid litre price will reduce to 28.1ppl (Muller) and 27.98ppl (Arla)  (www.milkprices.com)

 

Dairy Crest to hold its January price   (8th January 2017)

In line with the vast majority of cheese processors Dairy Crest has announced it will hold its farmgate price until February at 32ppl based on a standard manufacturing litre and 30.92ppl for a standard liquid litre (www.milkprices.com)

 

DEFRA Average Farmgate milk price stood at 32.34ppl for October    (8th January 2017)

According to DEFRA the average farm gate milk price for October stands at 32.34ppl which is bit of a surprise for an average.

 

GDT auction index up 0.4%   (8th January 2017)

The 16% reduction in the volume offered at this weeks Auction (29,514 tonnes) helped stabilise prices but they are still at an 8 month low.

 

Notable movers were:

SMP                                                    +4.7%   to average US$1774 tonne

WMP                                                   +1.7%   to average US$2830 tonne

Cheddar                                               -3.9%    to average US$3696 tonne

Butter                                                   -11.1%   to average US$4575 tonne

 

Arla farmers can earn around £1040 for only 20 minutes work before next Friday 15th    (8th January 2017)

Ian was asked to help an Arla farmer submit his data online in order to participate in Arla garden plus and it took us just under 20 minutes to complete.

 

Given the average Arla farmer produces at least 1.3 million litres annually the extra 1 euro cent per kg (0.8ppl) incentive for submitting this data comes to £1040 per farmer for 20 minutes work.

 

Whilst Arla would not confirm to Ian exactly how much milk the average Arla farmer delivers they did say it was at least 1.3 million litres and then said that a week today 15th December is the deadline for farmers to submit their details in order to get paid the extra in January to March period.  For those who haven’t done it yet Ian suggests they get a wiggle on because it’s easy money.

 

1.5ppl milk price drop for Muller Direct suppliers from January 1st   (1st December 2017)

This is the first confirmed milk price drop, which will affect around 700 Muller Direct farmers taking their standard liquid litre price down from 30.5p to 29ppl from January 1st (www.milkprices.com).  The fact Muller abide by the Voluntary Code is the reason for this early notification.  The price reduction represents a 5% fall.

 

NFU Scotland have lambasted the Muller announcement claiming it will open the floodgates.  The harsh reality is there are a few liquid processors who have been praying for Muller to make this announcement and they will certainly follow and quickly.  The party is over and some didn’t even arrive in time to get a slice of the cake!

 

1ppl milk price reduction for Arla directs – from 1st January   (1st December 2017)

This reduction will take producers standard liquid litre price to 28ppl (www.milkprices.com)

 

Freshways give advance warning of an anticipated January milk price reduction   (1st December 2017)

Freshways gave 30 days notice to its farmers on the 27th November of an anticipated 1st January price reduction in the region of 1 to 2ppl based on their basket of five competitor milk prices.

 

In addition, they have given 60 days notice to suppliers of a reduction in volume bonuses ranging from 0.2ppl to 0.8ppl dependent on annual volumes supplied.  The reductions take effect from February 2018.

 

South Caernarfon Creameries confirm no change to their January 2018 supplier milk price   (1st December 2017)

We wouldn’t normally mention price holds but with the current yo-yo milk pricing Ian feels any price hold announcements for January 2018 warrant a mention.

 

This first stand on price Ian received from SCC on Wednesday.

 

The January 1st manufacturing standard litre price for the SCC co-op’s members remains at 31.03ppl (www.milkprices.com)

 

Barbers Cheesemakers confirm no change to their January 2018 producer milk price    (1st December 2017)

This maintains producers’ standard manufacturing litre at 31.19ppl and the standard liquid litre at 30.08ppl.

 

Friesland Campina December price reduction still pays out circa 36ppl    (1st December 2017)

Even after a 0.24ppl December decrease the equivalent December liquid standard litre milk price for Friesland Campina farmers equates to a healthy 36.076ppl according to www.milkprices.com

 

The corresponding organic liquid standard litre price will be as near as damn it 45ppl.

 

AMPE and MCVE continue to pull back   (1st December 2017)

The November AMPE stands at 29.2ppl down 3.5ppl (from 32.7ppl October) in one month and now below the November 2016 AMPE value of 31.5ppl.  MCVE is faring a bit better at 34.9ppl down 1.7ppl from the 36.6p value for October.

 

Morrison liquid milk price move has snowballed    (1st December 2017)

Two weeks ago Morrisons increased its retail price of liquid milk from £1 for 4 pints to £1.10.  Within days Tesco, Sainsburys, ASDA, Aldi and Waitrose have tracked Morrisons and lifted their prices.

 

OMSCO and Wyke Farms join forces    (1st December 2017)

OMSCO and Somerset farm house cheesemakers, Wyke Farms, have announced the joint formation of “The British Organic Dairy Company” producing organic dairy products and growing market share with sales and marketing initiatives.

 

Fonterra fined circa £92million (NZ $183million)    (1st December 2017)

The arbitration tribunal responsible for the dispute resolution between Fonterra and Danone concerning a Fonterra product recall in 2013 has determined that Fonterra pays an eye-watering £92million equivalent in compensation.

 

As a result Fonterra has immediately downgraded its forecast earnings per share by an estimated 10 cents per share equivalent to around a 20% reduction with a statement that the fine will not impact on farm gate milk prices.  Howvever, when you are one of 10,500 co-op members it’s like a bulk bin if it comes out of the bottom quickly the bin soon empties and someone goes hungry.  The average cost if spread across 10,500 members and their families is equivalent to around £9,000 each.

 

BOX SCRAPER WANTED    (1st December 2017)

Width 6 foot up to 6 foot 6” (1.83m to 1.98m).  If you have one contact ianpotter@ipaquotas.co.uk

 

Arla stand on milk price for a second consecutive month   (24th November 2017)

It will come as no surprise that Arla are holding its member milk price for both conventional and organic for a second consecutive month.  Both Muller and Arla have held prices for December and as suggested in this bulletin on November 10th it’s almost inevitable Dairy Crest will stand alone as the only major buyer to increase its farmer milk price on December 1st (+0.5ppl).  Arlas liquid standard litre price remain at 31.05ppl and manufacturing 32.3ppl.  Its organic standard liquid litre is 41.79ppl and its manufacturing 43.47ppl.

 

In the current climate dairy farmers would be wise to wish (and pray) that Christmas and the New Year bring with them further cheer and stability with a stand on for January and dare we even suggest February!  It won’t be possible for all to hold prices this long, especially some of those exposed in the middle ground.  Prices in 2018 are set to pull back, the only question is which month and by how much?

 

Details of local slaughterhouses wanted   (24th November 2017)

We have been approached to track down local abattoirs to deal with TB animals, which need to be removed from farm quickly, mainly on welfare grounds and not be subject to unnecessary long journeys.

 

The slaughter rate is not to be sniffed at so if you know a good local slaughterhouse of any size who should be considered please email the name and location to joanne@ipaquotas.co.uk  Even better if you know a contact at the abattoir.

 

200th GDT auction is no reason to celebrate   (21st November 2017)

Today’s 200th GDT auction saw the average index drop a further 3.4% to average under US$3,000 to $2,970.

 

Notable movers were:

 

SMP                 down 6.5% to average US$1,701 tonne (under £1,290/tonne)

Butter               down 5.9% to average US$5,144 tonne

Cheddar            down 4.2% to average US$3,831 tonne

WMP                down 2.7% to average US$2,778 tonne

 

GDT auctions started 9 years ago in 2008 and now has buyers from 80 counties.

 

Meanwhile, www.milkprices.com and their fcstonemilkprices.com UK Milk Futures equivalent is reporting its forward curve delivering a nett 24.25ppl to producers reducing to 22.25ppl when trading costs, margins and risk are factored in which is pretty grim but not so grim for those who hedged a few months ago, particularly those who hedged part of their milk and took a 2 year deal.

 

Similarly the latest AMPE farm gate return is coming in at around 24ppl.  The New Year is going to be buckle up time.

 

0.5ppl milk price increase for Dairy Crest Davidstow suppliers – from 1st December could be the UK’s only December producer milk price increase  (10th November 2017)

This increase to date is the only December milk price increase and could remain very lonely!

 

The increase takes producers standard liquid litre milk price to 30.92ppl and the manufacturing standard litre to 32ppl (www.milkprices.com)

 

0.75ppl milk price increase for suppliers to Wensleydale Creamery from 1st November PRODUCER NOTIFIED    (10th November 2017)

This increase takes producers standard liquid litre milk price to 30.25ppl and the manufacturing standard litre to 31.2ppl (www.milkprices.com)

                                                          

Stand on Milk Price for suppliers to the European Giant Friesland Campina     (10th November 2017)

Friesland Campina have held their producer milk price pay out for October at the August rate which in UK terms converts to a liquid standard litre price of 35.8ppl and for an organic standard litre is equivalent to 43.6ppl (www.milkprices.com)

 

GDT auction results fell a further 3.5% to average $3105    (10th November 2017)

The latest 3.5% average auction price drop saw the price for WMP fall by 5.5% to US $2852 tonne. This the first time in seven months it has fallen below the accepted New Zealand break even price of $3,000 tonne putting further pressure on farm gate prices.

 

Key Price changes were:

 

WMP down 5.5% to average US $2852 tonne

Butter down 3.6% to average US $5516 tonne

Cheddar down 2.8% to average US $4001 tonne

SMP up 1.2% to average US $1818 tonne

 

94% of Northern Ireland’s 2017 SFP paid out in October   (10th November 2017)

Northern Ireland is still the only part of the UK which has once again helped its farmer’s cash flow by gaining authorisation from the Commission to make early payments of up to 70% of farmers SFP.

 

A total of £183 million was paid to 22,493 farmers by the 31st October with the balancing 30% plus any remaining monies for those farmers who failed to receive an advance payment to be made on or after December 1st.

 

UK milk production continues to rocket up

Latest figures from AHDB indicate that September’s milk was up 5.2%, taking the year to date figure up by 2.4% (175 million litres) equivalent to almost an extra 5 days of production clocked up in the first 6 months and seemingly increasing.

 

No Halloween Treats for Milk Producers – The Party is over!!    (31st October 2017)

It’s Trick or Treat today and with no new 1st November milk price increase announcements there are no more treats and as one seasoned and respected dairy industry guru commented to Ian “The party is over for those who managed to get to it.”

 

The milk production statistics look a shade bleaker as each week passes with Germany producing around 4% more milk than the same time last year and France up 2.8% with the Normandy region +9%.  Admittedly both were well behind in terms of comparable milk production for the first half of 2017.  Also Europe’s 3rd largest producer, the UK are rapidly heading towards a 2% increase in total milk production in the first 6 months of this milk year starting April 1st.

 

According to AHDB Dairy EU milk production is up an average 3.3% across 28 member states compared to 12 months ago.  Equivalent to an extra 102 million litres.

 

When the EU milk production giants Germany and France ramp up milk production closely followed by the UK, the end result almost appears inevitable.  Buckle up lads.

 

Spot milk has plummeted to almost 33ppl and cream prices continue to crash back from a high of £2.95 now trading at £2, a difference worth 9.5ppl to a liquid processor.  However, it’s still a relatively strong price.  AMPE has dropped by an eye-watering 7.2ppl (18%) in just one month from 39.9ppl to 32.7ppl.  This is really significant, particularly for the likes of Barbours’ producers, who receive a market related milk price for extra litres above their base volume (+8%) of AMPE less 2ppl.  For September that price paid to its farmers was 37.9ppl for October it’s down to 30.7ppl.

 

To pile on the pressure the suggestion is that when Intervention buying re-opens in March 2018 it is via a tender process with the fixed price for Intervention SMP and volume targets removed from day 1.  Futures prices instantly and significantly reacted to this news heading south because if this policy is confirmed there will be no floor in the market. It would appear that only Mother Nature can intervene and she could either cut production or add to it further come the spring.  Remember there is still close to 400,000 tonnes of SMP in EU Intervention stores, which will have to be sold.

 

Dairy UK’s UK Dairy Industry White Paper is an interesting read    (31st October 2017)

Rarely does the mention of a White Paper flick any lights on with Ian, however, the timing and content of the one published last Thursday by Dairy UK prompted Ian to study it.

 

It covers a range of topics including Brexit, dairy farming, consumers and marketing as well as world dairy trade and future prospects.

 

With a turnover of £28 billion per annum and 70,000 people relying on the industry for employment there is a lot at stake and the elephant in the room is Brexit.

 

The report quotes average herd size for 13,227 farms at 143 cows and comments “UK dairy farmers are professional, dedicated and efficient.  UK dairy farming is internationally competitive with a considerable latent capacity for growth”

 

To view the paper click on http://dairyuk.org/media-area/resources/item/the-white-paper-2017

 

Correction   (31st October 2017)

Mike Gallagher, in his Army career, was actually involved with bomb disposal.  Bomb disposal proved to be an extremely useful attribute for his mammoth task at First Milk where he successfully defused the bomb and averted the collapse of the co-op.

 

Scottish dairy farmers urged to sign up asap   (31st October 2017)

For Scottish dairy farmers the membership fee for Dairy Pro (the professional development register for the dairy industry) is free  for 2017/2018 courtesy of  Scottish Government and AHDB.

 

AHDB and the Scottish Government are aiming to have all Scottish dairy farmers signed up to Dairy Pro by December 31st

Dairy Pro  enables farmers to  view and register for training and events. In addition there is a  range of activities  including entrepreneurship classes, dairy discussion groups, workshops and meetings on topics from soil management to animal health, nutrition to business and people management, as well as on-line modules, quizzes and videos.

 

Farmers can register at  www.dairypro.co.uk.

 

This bulletin comes to you free – in return please …….    (20th October 2017)

 …….. complete this simple foreign labour questionnaire if you are a dairy farmer.  Either click on this link and complete it online or email us for a copy ……. https://www.surveymonkey.co.uk/r/RABDF

 

Farmer recipients of this bulletin who do not complete the survey will be telephoned by us for details.

 

Many thanks for your co-operation and for hopefully completing this very important survey.

 

0.5ppl milk price increase for Paynes suppliers -  From November 1st    (20th October 2017)

This takes producers standard liquid price to 30.5ppl (www.milkprices.com) and in this market environment a further 0.5ppl increase is an achievement as well as a bit of a surprise.

 

0.5ppl milk price increase for First Milk members – From 1st November    (20th October 2017)

The increase results in the following standard litre prices:

 

                                                Manufacturing                            Liquid

Haverfordwest                            30.57ppl                                    29.56ppl

Lake District                              30.45ppl                                    29.44ppl

Midlands & East Wales                                                              29.40ppl

Scotland                                                                                   29.09ppl

 

Arla stand on member milk price for November   (20th October 2017)

Arla’s decision to roll over the existing member milk price at 31.05ppl (32.3ppl based on a manufacturing standard litre) has surprised many and it’s almost inevitable member milk prices are at the top of curve in terms of returns from the market place, excluding increases from currency smoothing and other potential contributors.

 

GDT prices ease again    (20th October 2017)

Tuesday’s GDT Auction results saw average prices continue to ease this time by 1% to average US$3204

 

SMP down        5.6%

Butter down       2.5%

WMP down       0.5%

 

In General   (20th October 2017)

Spot milk is off the boil with limited quantities trading around 37p and prices trending south.

 

The recent cream highs of £2.95/£3.00 have dropped like a stone to £2.25/£2.30 equivalent to a reduction of 7ppl in a matter of weeks.  European cheese prices are also falling.

 

With production up in most of the EU member states (20 of them) there are concerns as to how much milk will be sloshing around next spring if a big flush comes.  Major increases include Ireland +11%, Poland +5% and UK +2%.

 

First Milk’s Annual Results include former CEO’s pay-out   (20th October 2017)

Included in a much improved set of results from First Milk for the year ending 31st March 2017 are details of former CEO Mike Gallacher’s remuneration.

 

For sure Gallacher inherited a co-op, which was walking a tightrope in terms how close it was to closing its doors potentially leaving 700 or so dairy farmers experiencing even more financial pain.  He fixed it and quicker than anyone imagined. 

 

Mike’s total 2017 remuneration was £1.155 million including a final contractual payment of £553,000.  In 2016 he received £539,000. 

 

Some will say the former army bomb disposal man works on the premise of “Who Dares Wins” but when he took the turnaround job on most in the industry gave him Bob Hope and No Hope but he succeeded for which he is entitled to be remunerated properly.

 

Key details from First Milk’s financials   (20th October 2017)

Turnover down 30% to £206.5 million (£294.2 million 2016)

 

Operating profit up 95% to £11.7 million (£6.0 million 2016)

 

Net Bank Borrowing up 17% to £37.6 million (£32.1 million 2016)

 

Pension Debit Liability up 75% £11.2 million (£6.4 million in 2016)

 

Nett Profit up 17% £6 million (£5.1 million loss in 2016)

 

First Milk are certainly a shadow of their former size in terms of milk volume and member numbers and have now slipped from 3rd into, at best, 5th place in terms of UK dairy processor size having been comfortably overtaken by both Meadow and Dale Farm.

 

Bulletin Distribution   (20th October 2017)

If you wish to be removed from this distribution list, simply bounce it back with “remove” in the subject line. On the other hand, if you received this newsletter second hand, but would prefer your own copy, simply bounce this back, or otherwise send us an email with “add me” in the subject line. It’s that simple.

 

1ppl milk price increase for Pensworth Dairy suppliers – from 1st November   (9th October 2017)

This takes producers’ standard liquid litre price to 30ppl (www.milkprices.com)

 

1ppl milk price increase for OMSCO 270 producers – from 1st October   (9th October 2017)

In addition, OMSCO have announced a 0.25ppl cell count bonus.

 

0.98ppl milk price increase for CTRG (Co-op) suppliers – from 1st November    (9th October 2017)

This takes producers’ standard liquid litre price to 29.39ppl (www.milkprices.com)

 

0.8ppl milk price increase for Waitrose suppliers – from 14th September

This takes producers’ standard liquid litre price to 30.92ppl (www.milkprices.com)   (9th October 2017)

 

0.75ppl milk price increase for Belton Farm suppliers – from 1st November  (9th October 2017)

This takes producers’ standard manufacturing litre price to 30.75ppl and the standard liquid litre price to 30ppl (www.milkprices.com)

 

0.5ppl milk price increase for South Caernarfon Creameries suppliers – from 1st November   (9th October 2017)

This increase is in the form of a 1st November to 28th February 2018 winter premium payment.

 

0.5ppl milk price increase for Dairy Crest Davidstow suppliers – from 1st November   (9th October 2017)

This takes producers’ standard manufacturing litre price to 31.5ppl and on a standard liquid litre price to 30.42ppl (www.milkprices.com)

 

0.36ppl milk price increase for Marks & Spencers suppliers – from 1st October    (9th October 2017)

This takes producers’ standard liquid litre price to 30.44ppl (www.milkprices.com)

 

Friesland Campina 35.73ppl October milk price    (9th October 2017)

The latest 1.25 Euro per kg milk price increase announcement for Friesland Campina suppliers according to current exchange rates results in standard liquid litre price of 35.73ppl (www.milkprices.com)

 

GDT prices down 2.4%  (9th October 2017)

GDT auction prices reflect current national and international market sentiment recording a fall in most key commodity prices with only cheddar prices recording a positive move.  Note, the volume of product on offer was up 11% on that offered last month.

 

Key movers:

 

Butter               -3.6% to average US$5837

WMP                -2.7% to average US$3037

SMP                 -1.4% to average US$1895

Cheddar            +1.9% to average US$4109

 

RABDF Conference    (9th October 2017)

There's little doubt the RABDF has pulled its trousers up after the loss of its flagship show last year, and is upping its work on key areas like labour in order to fulfil its brief of  "delivering more depth to members and the wider industry".  We'll be helping them get more facts on this crucial issue over the next few weeks to try and prove the seriousness of the issue to the Government, so please help us to help the RABDF to help you. More details will follow.

 

Next on the RABDF's agenda is a relaunch of its once successful Business and Policy Conference, which takes place on Wednesday 18 October in London. 

 

A high profile line up of speakers will talk about the potential effects Brexit could have on the UK dairy industry, and will focus on key topics including the organisation's recently published report into European labour, AMR strategies, industry trends and the findings of Mike Houghton’s Trehane Fellowship report. More details and tickets from www.rabdf.co.uk/business-policy-conference with preferential rates for RABDF members and farmers.

 

Foreign labour on UK dairy farms is critical   (9th October 2017)

The RABDF has delivered a report to DEFRA detailing how critical the maintenance of the open pipeline of foreign labour is to UK dairy farmers.  The report states:

 

“Current reliance on EU labour would mean an almost catastrophic failure within the sector should short term access to overseas labour not be maintained” and

 

“measures to secure continued access to semi-skilled and skilled European labour must be in place to avoid disadvantaging UK dairy farmers and impacting on the economic viability of the sector ….” 

 

In her industry comments at last week’s South West Dairy Show, NFU Deputy President Minette Batters referred to a dairy labour crisis pointing to 43 adverts for dairy herdsmen in Farmers Weekly and a backlog of vacancies to fill with numerous dairy labour agencies.  Minette suggested that dairy farmers were quitting because they simply cannot find the staff.

 

Ian plans to do some survey work with farmer recipients of this bulletin on this very important Brexit issue.

 

Polish dairy to join the ever expanding GDT auction family    (9th October 2017)

Polish Dairy is the latest dairy product seller to join GDT auctions and will offer product from next month when it will initially offer key products including WMP, SMP and butter to over 500 worldwide registered buyers.

 

1ppl milk price increase for Meadow Food suppliers – from 1st November   (29th September 2017)

This takes producers’ standard liquid litre price to 31ppl and based on the standard manufacturing litre the price is 31.25ppl (Cumbria) and 31.38ppl (Cheshire).  (www.milkprices.com)

 

Meadow are one of the few milk purchasers who offer a B price, which for August deliveries was 35ppl and for September is budgeted to be at a similar level sitting somewhere between 33 to 36ppl.

 

1ppl milk price increase for Arla Directs – from 1st October  (29th September 2017)

This takes producers’ standard liquid litre price to 29ppl and based on the standard manufacturing litre the price is 30.16ppl.  (www.milkprices.com)

 

1ppl milk price increase for Crediton Dairy suppliers – from 1st November   (29th September 2017)

This takes producers’ standard liquid litre price to 31ppl.  (www.milkprices.com)

 

0.5ppl milk price increase for Muller Direct suppliers – from 1st November    (29th September 2017)

This takes producers’ standard liquid litre price to 30.5ppl.  (www.milkprices.com)

 

1 to 1.1ppl milk price increases for First Milk members – from 1st October     (29th September 2017)

The increase and resulting 1st October standard litre prices (www.milkprices.com) are as follows:

 

Pool                                         1st October                   1st October standard litre price

                                                increase                       Manufacturing             Liquid

Midland & East Wales                1.1ppl                                                               28.90ppl

Scotland                                   1.1ppl                                                               28.59ppl

Haverfordwest                            1.0ppl                           30.05ppl                        29.06ppl

Lake District                              1.0ppl                           29.93ppl                        28.97ppl

 

0.5ppl milk price increase for Wyke Farms suppliers – from 1st November (PRODUCER NOTIFIED)   (29th September 2017)

This takes producers’ standard liquid litre price to 30.15ppl and based on the standard manufacturing litre price 31.22ppl (www.milkprices.com)

 

0.13ppl milk price reduction for Tesco (TSDG) aligned producers – from 1st November    (29th September 2017)

This takes producers’ standard liquid litre price to:

 

Muller Tesco                  29.45ppl

Arla Tesco                     32.46ppl (based on the Arla member price for 1st October 31.04ppl)

 

The 0.13ppl reduction is based on feed, fuel and fertilizer prices supplied by Anglia Farmers and crunched by Promar.

 

Milk Prices as at October 1st (based on www.milkprices.com standard liquid litre)    (29th September 2017)

 

Tesco Arla                                             32.59ppl

Arla Foods Non-Aligned                          31.04ppl

Crediton Dairy                                        30.00ppl

Freshways                                            30.00ppl

Meadow Foods                                      30.00ppl

Muller Direct                                          30.00ppl

Paynes                                                 30.00ppl

Glanbia                                                 29.96ppl

Davidstow                                              29.92ppl

Grahams Scotland                                 29.75ppl

Wyke Farms                                         29.65ppl

Tesco Muller                                          29.58ppl

Pattermores                                          29.50ppl

Arla Directs                                           29.00ppl

Pensworth                                             29.00ppl

First Milk Midlands                                 28.90ppl

Lactalis/Caledonian                                28.50ppl

Sainsburys SDDG                                  28.09ppl

 

1.55ppl milk price increase for suppliers to Payne's Dairies - from 1st October    (25th September 2017)

This takes producers’ standard liquid litre milk price to 30ppl www.milkprices.com

 

1.5ppl/1.43ppl total increase for Arla members - from October 1st     (25th September 2017)
Arla have increased members’ October milk price by 1.5ppl split into 0.84ppl based on a 1 Euro Cent price increase plus 0.66ppl for currency smoothing taking producers’ manufacturing standard litre to 32.30ppl.

The total increase amounts to 1.43ppl for liquid suppliers and for the 1st October the liquid standard litre price will be 31.04ppl.

The organic standard manufacturing litre price increases to 43.47ppl as a result of a currency smoothing increase of 0.66ppl and the organic liquid standard litre price increases by 0.63ppl to 41.79ppl www.milkprices.com

1ppl milk price increase for Grahams Dairies suppliers - from 1st October    (25th September 2017)
This takes producers’ standard liquid litre price to 29.75ppl wwwmilkprices.com

1ppl milk price increase for Yew Tree Dairies liquid contracted suppliers - from 15th October     (25th September 2017)
This takes producers’ standard liquid litre price to 30ppl www.milkprices.com

0.24ppl COP milk price increase for SDDG (Sainsbury's) - from October 1st    (25th September 2017)
This takes producers’ standard liquid litre price to 28.21ppl for Muller contracted producers and 28.09ppl for Arla contracted producers www.milkprices.com

30 jobs to go at First Milk Creameries at Lake District (20) and Haverfordwest (10)     (25th September 2017)

The reductions are as a result of capital investments at both sites and First Milk are aware that these investments need to translate into cost savings, which urgently need to be converted into improved payments in milk prices to members.

 

1ppl milk price increase for Freshways suppliers – from 1st October (PRODUCER NOTIFIED)   (15th September 2017)

This takes producers’ standard liquid litre price to 30ppl (www.milkprices.com)

 

36ppl for Friesland Campina producers – from 1st September   (15th September 2017)

Following the announcement of yet another price rise taking the total increase year on year to 14.6ppl www.milkprices.com calculate that the current September Friesland Campina milk price based on milkprices.com UK  standard liquid litre converts to 35.969ppl, with its corresponding organic price converting to 43.517ppl.  The actual September price increase amounts to 2.56ppl.

 

There was a time when the Arla milk price tracked the FC price but not this time as the gap continues to widen

 

UK Dairy Day gets the thumbs up   (15th September 2017)

By special invitation Ian made his first visit to UK Dairy Day at Telford on Wednesday and it appeared to be a huge success.

 

Understandably given the current long awaited upward trend in milk prices farmers and exhibitors were all optimistic for the future (some perhaps cautiously optimistic) and the show had a real buzz and attendance was rumoured to be a record 9000 plus for this, its fourth annual event.

 

Full marks to the organisers because for Ian the event was well organised from the parking through to the exit procedure.  The lay out of the event was good and there was certainly plenty for anyone involved in dairying to fill their day up.

 

Congratulations to Holstein UK for making sure the post show media headlines were positive with no one stepping out of line or attempting to cast a cloud over the organisational efforts, which led to the events success.  Ian even managed to walk the cattle lines amidst smiles and welcomes, although he half expected one or two exhibitors might want to lasso him and dig their spurs in his shins, if not throw their prized stolen tomahawks in his back. But fortunately there seemed to be enough alert Sherrifs to keep any cowboys at bay.

Indeed the only grumbles which were made to Ian came after the show and related to issues involving two well known dairy exhibitors with one of them having a winning animal supposed to be exhibitor bred but allegedly was of Swiss origin with a Swiss tag. Both appeared to be fairly minor issues compared to what both exhibitors could have achieved if they had wanted to attract negative attention to the event.

 

It’s certainly one for Ian’s diary for 2018.

 

Paul Vernon CEO of Glanbia Cheese is Dairy UK’s new chairman   (15th September 2017)

Paul Vernon has taken over from David Dobbin as Chairman of Dairy UK whose term of office ended at this week’s AGM.  In addition, Andrew McInnes, MD of Muller and Thomas Pietrangeli, MD Arla Foods, are both vice chairs.

 

David Dobbin will be a very tough act to follow and stepping into his shoes will not be easy for Paul, especially when UK dairy faces so may big challenges.  We look forward to Paul making his mark as chairman of the organisation.

HERDSPERSON OPPORTUNITY   (15th September 2017)

Progressive 350 cow robotic dairy unit in Truro, Cornwall seeks enthusiastic team player to join us. Excellent package for the right person. Accommodation provided. Regular time off.

Please call Tom for more information on 07791535128.

GENUINE SALE OF 25 TOP QUALITY PROVEN BULL BRED COWS (Mostly Pedigree)

Cows surplus to the milk buyers’ requirements.

 

Calving from 1st November to early December.  4.8% Fat and 3.8% Protein

In calf to easy calving.  BB Genus Semen

Herd is grazing (Feb – Dec) 7000 litre yield (600kgs solids)

Offers over 1350/cow, East Midlands – Preferably as one lot

 

Tel.  07973 421282 or 07980 732330

 

1ppl milk price increase for suppliers to Meadow Foods – from 1st October   (8th September 2017)

This takes producers’ standard liquid litre price to 30ppl (www.milkprices.com)

 

1ppl milk price increase fro suppliers to Pattemores Dairy, Somerset – from 1st October    (8th September 2017)

This takes producers’ standard liquid litre price to 29.50ppl (www.milkprices.com)

 

GDT up 0.3%    (8th September 2017)

Butter prices continued to head north at this week’s auction.  The key movements were:

 

Butter               +3.8% to average US$5954/tonne

Cheddar            +2.5% to average US$4118/tonne

SMP                 -1.2% to average US$1944/tonne

WMP                -1.6% to average US$3100/tonne

 

Spot butter, if there is any to trade, is reported to be changing hands trading for up to £6400/tonne (€7,000).

 

Barbers pay 38.1ppl on August deliveries above the Base Volume   (8th September 2017)

Barbers decision to pay a transparent AMPE minus 2ppl related price for deliveries above the 8% threshold is certainly paying off for its farmers who are able to produce more milk with a nett August payout of 38.1ppl on those extra litres up 3.4ppl on the 34.7ppl paid in July.

 

New dairy auction partnership in Europe   (8th September 2017)

GDT and EEX (Europe Energy Exchange) have signed a letter of intent with a view to working in partnership to launch an auction mechanism for European dairy products.

 

The muscle and expertise GDT brings to the table having run almost 200 twice monthly dairy auctions and now involving 520 buyers from 80 countries probably indicates the European auction will happen.  Once launched it will provide more relevant local price discovery and trends for UK farmers to monitor.

 

Medina Dairy Commercial letter could have done better    (8th September 2017)

In a letter dated 11th August 2017 from Medina’s Commercial Director to its liquid customers its clear the author did not do his research and by default didn’t really state the truth behind the 4ppl August milk price increase, which Medina have pushed through.

 

The letter states, “As you may be aware from recent communications and news articles, milk production in the UK has been slipping backwards compared to this time last year.”

 

Sorry Medina but UK milk production       in June was up 24 million litres or 1.9% and

in July was up 21 million litres or 1.8%

 

What perhaps should have been stated is that demand, particularly for fat, has rocketed worldwide and not that the reason for prices increasing is based on lack of supply/UK production slipping back.

 

The author then mischievously went on to state “Milk availability from farms is very tight and we find ourselves having to pay inflated prices to secure milk required to satisfy customer orders.”

 

The use of the word inflated was the main reason eyes were raised by one reader who received the letter.  On the flip side the letter does recognise that Medina farmers have to be paid more money to cover increased costs, which is bang on the money and Medina are clearly increasing prices to customers in recognition that higher farm gate prices are likely to continue for at least the medium term.

 

AMPE breaks 40ppl and MCVE reaches a new record   (4th September 2017)

AMPE has reached a new high for August at 40.1ppl as has MCVE which stands at 38.7ppl.  The all time low points were only 16 months ago in April 2016 with AMPE at 15.5ppl and MCVE 15.7ppl. 

 

The two market indicators started in January 2010 and both give a useful estimate of market returns and current price trends.  For more details log on to https://dairy.ahdb.org.uk/market-information/milk-prices-contracts/market-indicators/ampe-mcve/#.Wa1hkNLrvoC

 

Cream income worth 16.66ppl to a liquid processor but whose having that cream?   (4th September 2017)

According to AHDB Dairy 12 months ago cream income was worth 8.6ppl to a liquid processor and is now almost double at 16.66ppl and another record high.  Problem is whilst its worth 16.66ppl in a number of aligned cases it’s the retailer who has pocketed most, if not all, of the extra cream income.

 

30p plus is a clear target    (4th September 2017)

Below are 15 more milk price increases and based on a liquid standard litre it’s clear any milk purchaser who does not pay at least 30ppl by October 1st at the latest is under the spotlight and any suppliers should be asking for an explanation why they are the poor relations holding out their begging bowl again!

 

1ppl milk price increase for Muller Direct (non aligned) suppliers – from 1st October   (4th September 2017)

This increase takes producers’ standard liquid litre price to 30ppl above the Tesco aligned price, especially when scale back is factored in (www.milkprices.com)

 

1ppl milk price increase for Muller Organic suppliers – from 1st October   (4th September 2017)

This increase takes producers’ organic standard liquid litre price to 41.5pl  (www.milkprices.com)

 

1ppl milk price increase for Arla Directs – from 1st September    (4th September 2017)

This increase takes producers’ standard liquid litre price to 28ppl and the corresponding manufacturing standard litre price to 29.12ppl.  (www.milkprices.com)

 

1ppl milk price increase for suppliers to South Caernarfon Creameries – from 1st October     (4th September 2017)

This increase takes producers’ standard manufacturing litre price to 31.03ppl and the corresponding liquid standard litre price to 30.01ppl (www.milkprices.com)

 

1ppl milk price increase for suppliers to Glanbia (Cheese) – from 1st October    (4th September 2017)

This increase takes producers’ standard manufacturing litre to 31ppl and the corresponding liquid standard litre price to 29.96ppl.  (www.milkprices.com)

                                                                                                                                   

1ppl milk price increase for suppliers to Pensworth – from 1st October    (4th September 2017)

This increase takes producers’ standard liquid litre price to 29ppl (www.milkprices.com)

 

1ppl milk price increase for Wyke Farms (Cheese) suppliers  – from 1st October    (4th September 2017)

This increase takes producers’ standard manufacturing litre price to 30.07ppl and the corresponding liquid standard litre price to 29.65pl (www.milkprices.com)

                                                                                                                                                                            

1ppl milk price increase for Wensleydale Hawes suppliers  – from 1st September -  PRODUCER NOTIFIED   (4th September 2017)

This increase takes producers’ standard manufacturing litre price to 30.45ppl and the corresponding liquid standard litre price to 29.5ppl (www.milkprices.com)

 

1.5ppl milk price increases for Lactalis suppliers  – split over two months  - PRODUCER NOTIFIED    (4th September 2017)

The increases are 1ppl on October 1st and 0.5ppl on December 1st.  Note, Lactalis gave its producers a guaranteed minimum price of 27.5ppl for all of 2017 back in 2016.

 

The 1ppl October increase takes producers’ standard manufacturing litre price to 29.51ppl and the corresponding liquid standard litre to 28.5ppl (www.milkprices.com)

 

Between 1ppl to 1.1ppl milk price rises for First Milk members – from 1st September    (4th September 2017)

The co-op’s increases are as follows:

 

                                                1st September standard litre price

                                                Liquid                Manufacturing

           

Midlands           +1.1ppl             27.8ppl             

Scotland           +1.1ppl             27.49ppl           

Lake District      +1ppl                27.98ppl            28.93ppl

Havefordwest     +1ppl                28.10ppl            29.05ppl

Haverfordwest

Tesco Group      +1ppl                29.60ppl            30.55ppl

 

0.7ppl milk price increase for suppliers to Joseph Heler Cheese – from 1st October   (4th September 2017)

 

Fixed price contract offering for Crediton Dairy suppliers    (4th September 2017)

Crediton Dairy are offering its farmers the opportunity to fix either 10% or 20% of their milk output for 2 years at 28ppl starting next month.  The initial litreage on offer is 10 million litres with all farmers guaranteed 10% and if the 20% option is over subscribed scale back will be applied but only to those seeking to fix 20% of their 2 year output.

 

1.5ppl milk price increase for suppliers to Crediton Dairy – from 1st October    (25th August 2017)

This takes producers’ standard liquid litre price to 30ppl (www.milkprices.com) 

 

The increase is broken down in to two parts.  A base price increase of 1.3ppl plus an additional 0.2ppl, which has been added where bactoscans are below 30,000ml.  Note, Crediton’s average bactoscan count is within the 20,000 to 25,000 range.

 

1ppl milk price increase for suppliers to Belton Farm (Cheesemakers) – from 1st October   (25th August 2017)

This takes producers’ standard manufacturing litre price to 30ppl.

 

0.79ppl (1 Euro Cent) increase for Arla Foods members – from 1st September    (25th August 2017)

The Arla conventional price for a standard liquid litre increases by 0.79ppl to give a new standard litre price of 29.61ppl.  Based on a manufacturing standard litre the September 1st price increase is by 0.81ppl resulting in a September manufacturing standard litre of 30.79ppl.

 

The UK organic liquid standard litre remains unchanged at 41.16ppl and its manufacturing equivalent at 42.81ppl.  Note, the organic milk price in Germany, Denmark & Sweden does increase from September 1st by 0.79ppl (liquid) and 0.81ppl (manufacturing).  (www.milkprices.com)

 

Milk production update    (25th August 2017)

According to AHDB Dairy GB milk deliveries are up 0.8% higher than the same week a year ago, which equates to 200,000 litres/day.

 

Deliveries for July are estimated to be up 1.4% on the year at 989 million litres.

 

June EU milk production across all 28 member states was up a tasty 2.7% compared to June 2016.

 

Massey Ferguson 1200 For Sale on E bay – Ends Tuesday 29th August 2017 @ 8pm     (25th August 2017)

http://www.ebay.co.uk/itm/MF1200-Articulated-Tractor-Honest-original-unmolested/272812250194?_trkparms=aid%3D111001%26algo%3DREC.SEED%26ao%3D1%26asc%3D20160727114228%26meid%3Ddeb065770da04dba8387ca1f4e9e6ce5%26pid%3D100290%26rk%3D1%26rkt%3D4%26mehot%3Dpp%26sd%3D272812250194&_trksid=p2060778.c100290.m3507

 

2ppl milk price increase for Dairy Crest’s Davidstow suppliers – from 1st October (21st August 2017)

This takes producers standard manufacturing litre price to 31ppl and the standard liquid litre price to 29.92ppl (www.milkprices.com)

 

1ppl milk price increase for Wensleydale Hawes suppliers – from 1st August (21st August 2017)

This take producers standard manufacturing litre price to 29.45ppl and the standard liquid litre price to 28.5ppl (www.milkprices.com)

 

1ppl milk price increase for Grahams Dairies suppliers – from 1st September  (21st August 2017)

This take producers standard liquid litre price to 28.75ppl (www.milkprices.com)

 

1.19ppl cost compensation payment to 300 Arla Farmers from Morrisons (21st August 2017)

Morrisons have announced several changes to its Milk for farmers range which involves 300 invited Arla farmers.

 

Of the 300 involved 50 are the dedicated pool supplying upto 60 million litres of segregated milk processed at Arla’s Aylesbury facility.

 

These 50 farms supply milk to Morrisons to higher welfare standards and requirements which are above those set by Arlagarden as well as ensuring their cows are out grazing for a minimum of 120 days each year. The cost compensation they will receive is 1.19ppl split 0.96ppl to compensate for milk recording mobility scoring etc plus 0.23ppl as a grazing payment. These payments will be made by Morrisons from the 1st of this month/August.

 

The remaining 250 Morrisons farmers, who are nominated as apposed to dedicated, receive the 0.96ppl compensation but do not have to meet the 120 day minimum grazing requirement and consequently do not receive the additional 0.23ppl. These farmers have to fulfil the additional higher welfare requirements by 1st September (2017) with some dispensation for special circumstances for example farmers who haven’t previously milk recorded and need to install the kit.

 

The 300 farmers have all been invited by Arla & Morrisons based on logistics only a couple have rejected the opportunity whilst others have been very keen to join the substitutes list.

Morrisons continue to sell the milk for farmers range at a premium with the extra 10ppl consumers pay going to supporting British Farmers and their extra efforts.

 

Note Arla will be sole suppliers to Morrisons from spring 2018.

 

Spelling correction on story regarding Fayrefields Liquids (21st August 2017)

In the story regarding Meadow Foods buying Fayrefields Liquids division we stated:

We have been in dispute with Muller regarding the supplement, but unfortunately it has now been resolved, causing our milk business model to be dysfunctional and lose substantial sums of money.

 

There was a spelling error and the word now should have been not and the line should have read as follows …..

We have been in dispute with Muller regarding the supplement, but unfortunately it has NOT been resolved, causing our milk business model to be dysfunctional and lose substantial sums of money.

 

Muller’s take on Fayrefields comments (21st August 2017)

For Muller there is no case to answer regarding the retailer supplement.  Muller commented “The allocation of supplementary payments from certain retailers to Muller dairy farmer suppliers during a period when the market for farm gate was depressed, was handled transparently by Muller and aligned with customers in advance.”

 

Basically Muller have numerous third party supply contracts which are based entirely on volume, price and are for a period of time and as was the case with Fayrefield do not relate to Muller’s non-aligned farm gate price.  In fact, the Fayrefield contract should be better described as a premium price Muller paid and the percentage Fayrefield distributed to its supplying farmers is entirely down to Fayrefield.

 

Muller also commented:  “Third party companies from whom we buy milk receive a price per litre which is negotiated and agreed.  How they then choose to use that income is entirely a matter for them.”

 

The litmus test will be whether Meadow continue to pursue a similar dispute with Muller now they own the business.            

 

1.25ppl milk price increase for suppliers to Barbers Farmhouse Cheese   (9th August 2017)

Split over two months as follows:

 

0.75ppl from October 1st takes producers standard liquid litre price to 29.586ppl and the standard manufacturing litre to 30.681ppl  (www.milkprices.com)

 

0.50ppl from November 1st takes producers standard liquid litre price to 30.074ppl and the standard manufacturing litre to 31.193ppl  (www.milkprices.com)

 

In addition farmers who increase production by 8% or more receive AMPE minus 2ppl, which on today’s numbers, with AMPE at 36.7ppl, equates to 34.7ppl on July additional deliveries.

 

1ppl milk price increase for suppliers to Glanbia Cheese – from 1st September    (9th August 2017)

This takes producers manufacturing standard litre to 30ppl and the standard liquid litre to 29ppl (www.milkprices.com)

 

1ppl milk price increase for suppliers to Pattemores – from 1st September    (9th August 2017)

This takes producers standard liquid litre to 28.5ppl (www.milkprices.com)

 

0.75ppl milk price increase for suppliers to South Caernarfon Creameries Limited – from 1st September   (9th August 2017)

This takes producers standard manufacturing litre to 30.03ppl and the standard liquid litre to 29.01ppl.

 

SCC are selectively recruiting new suppliers in mid and North Wales.

 

0.75ppl milk price increase for suppliers to Joseph Heler Cheese - from 1st September    (9th August 2017)

 

GDT volume up and average down 1.6%    (9th August 2017)

Last Tuesday’s GDT auction produced an average index down 1.6%; however, note the volume on offer increased by 23%.

 

Notable movers were:

Butter down 4.9%

Cheddar down 4.8%

SMP down 3.0%

WMP up 1.3%

 

Don’t get excited and go mad   (9th August 2017)

September price increases push most competitive farm gate milk prices to the 28 to 30p bracket by September on a standard liquid litre.  However, most analysts, backed up by forward price expectations, anticipate production will increase in 2018, especially from June onwards where forward price expectations are now cooling.

 

0.356ppl retail supplement confirmed by Muller for July deliveries   (9th August 2017)

This will be paid to Muller Direct (non aligned) farmers.

 

Meadow Foods acquires Fayrefields Liquids division    (9th August 2017)

It was inevitable that the intervention and investment in Meadow Foods by Paine & Partners almost 12 months ago would result in expansion and acquisition and this is the first move with Meadow acquiring Fayrefield Foods liquid business, which sits within their existing milk field areas so it’s a logical move and fit.

 

Meadow are presently meeting existing Fayrefield farmer suppliers to explore integration of contractual terms to bring all suppliers onto one Meadow contract.  Those who choose to sign up and commit to Meadow this month will see a 1.15ppl increase on their standard liquid litre milk price backdated to August 1st.

 

In a letter announcing the sale to its suppliers Fayrefield clearly point the finger towards an almost forced sale as a result of the dispute between Fayrefield and Muller and Muller’s refusal to pass on any of the retailer supplement payments.  The letter states:

 

“Our decision to exit the liquid milk business was taken reluctantly.  The main reason is the ‘retail supplement’ which has significantly compromised the milk returns to our farmers.  The way the supplement has been distributed has caused Fayrefield to lose significant money on liquid milk since the supplement started.

 

Fayrefield Foods procure significant quantities of dairy product from Muller, and Fayrefield supply Muller with significant volumes of quality British milk.  The supermarkets pay Muller a ‘retail supplement’ on liquid milk to help struggling British farmers, but Muller has refused to pass on any of the supplementary payments to Fayrefield to give to our farmers.

 

We have been in dispute with Muller regarding the supplement, but unfortunately it has not been resolved, causing our milk business model to be dysfunctional and lose substantial sums of money.

 

We don’t believe the retailers, who initiated the supplement, intended to discriminate against so many UK farmers in this way.”

 

To be fair the distribution of the retail supplements has certainly been discriminatory and cost a number of farmers collectively into the millions of £ and seems to have passed without any real comment or challenge.  Fayrefield have clearly been pushed into a corner and faced with two options in either continuing to fulfil current contracts and either losing money or paying farmer suppliers an off the pace uncompetitive milk price or selling the business.  From a supplying farmers selfish point of view the decision taken by Fayrefield to sell its liquids division is likely to have been the least painful one to its farmers.

 

Muller unveils its non-aligned Muller Direct Futures facility     (9th August 2017)

After several months of preparation Muller has unveiled its new futures hedging contract allowing producers to fix their farm gate milk price on up to 25% of their anticipated milk supply for 12 months.

 

The facility is available to the 700 or so Muller non-aligned farmers who going forward will be known as Muller Direct.

 

At first sight it sounds complicated but in reality it’s fairly straightforward.

 

On the third Wednesday of each month Muller Direct suppliers will be able to log in and view a paid price to them for each of 12 months based on a www.milkprices.com standard litre.

 

This window of opportunity will be open for 24 hours following which once closed Muller have up to a further 48 hours to execute the trades with FC Stone.  Pilot work and dummy runs suggest the backing of trades within this 48 hour window is achievable.  Note, if the execution price varies by +2% there will be no commitment for the farmer to trade and if trade is below the quoted figure Muller will not execute a trade which eliminates any downside to the farmer from a downward price movement.

 

A farmer will trade over 12 months so if say he wants to trade 10,000 litres month he will trade the minimum lot size of 120,000 litres and trade at 12 individually monthly prices  x 10,000 litres which he presumably will average out over the 12 month period.

 

A farmer doesn’t have to trade all 12 months at one go and could in the example above trade 5 months x 10,000 and trade the remaining 7 months at a later date.  In the unlikely event he signs up to trade and fails to place trades for part of his allocation he will simply receive an AMPE related milk price.

 

The planned allocations are as follows:

 

35 million litres in August 2017

35 million litres in January 2018

30 million litres in April 2018

100 million litres

 

Note, these are allocations and do not have to all be traded in these months.

 

So for any 30 million litre allocation it would require 250 of the 700 Muller Direct farmers to take one minimum allocation of 120,000 litres for it to be fully subscribed following which scale back will be triggered. For a 35 million litre allocation it equates to 291 farmers on minimum allocations prior to scale back

 

Muller’s aim is to be fair and ensure any scale back gives an equal opportunity for producers of all herd sizes to trade.

 

Transparency will be maintained and policed by Steven Bradley (www.milkprices.com) whose job it will be to convert the current EEX price to a ppl price then deduct a declared processor margin, 0.55ppl trading fee to provide a nett milk price paid to the farmer for publication on the website.

 

It’s a big move by Muller and farmers are likely to fall into one of 3 categories:

 

(a)    Don’t intend to use the hedging mechanism for a number of reasons

(b)    Will monitor what happens, aim to understand how it works and might give it a trial

(c)    Instantly grasp the concept and logging in to the 24 hour window will be a must do and will trade when they can hedge and secure a margin over their COP.

 

More commentary on hedging and smoothing mechanisms will appear in Ian’s next Dairy Farmer article.

 

The real work must now fall to the newly formed group of Muller farmer representatives whose job it must be to meet farmers and explain how it works and why it’s a useful tool.  It’s perhaps a unique opportunity for those of the 21 who are on retailer aligned contracts to demonstrate that they do represent all Muller producers interests in their patch.

 

Muller launch Muller Farm Insight    (9th August 2017)

Muller have certainly been busy pulling together new ideas for its non-aligned farmers (Muller Direct) and launching them this month.

 

Ready at the end of this month is 12 month pilot named Farm Insight, which is up to 1 days free and optional on farm consultancy together with a report to cover a range of issues prepared by AB Sustain (part of the AB Agri Group).

 

Areas to be covered include likely implications of Brexit and comparative farm data with the hope it will help producers be more competitive in the future, especially in a post Brexit and SFP world.

 

Most of the dairy retailer aligned farmers have seen positive cash advantages as a result of on farm improvements which have both reduced cost of production and/or increased output.  Farm Insight is entirely voluntary for the 700 farmers but given its funded by Muller it must surely worth taking advantage of. 

 

However, it’s fine taking advantage of the opportunity but for some farmers change does not come willingly or easily and if you don’t intend to implement change there seems little point going through the exercise.

 

Note, when Ian asked Muller about their access to the comparative data Muller stated that the agreement they have signed will give them access to the combined group comparative data but no individual farm data which would highlight to Muller the lowest and highest cost of production farms.

 

0.75ppl milk price increase for suppliers to Pensworth Milk – from 1st September  (4th August 2017)

This 0.75ppl increase for September follows another 0.75ppl increase from 1st August

 

1.31ppl milk price increase for suppliers to Muller Direct - from 1st September    (1st August 2017)

This takes producers standard liquid litre price to 29ppl (www.milkprices.com)

 

1ppl milk price increase for suppliers to Arla Direct -  from 1st August   (1st August 2017)

This takes producers standard liquid litre price to 27ppl (www.milkprices.com)

 

0.85ppl milk price increase for suppliers to Meadow Foods - from 1st September   (1st August 2017)

This takes producers standard liquid litre price to 29ppl (www.milkprices.com).  Meadow Foods B price for July will be between 30ppl to 33ppl.

 

First Milk’s August 1st milk price increases    (1st August 2017)

0.9ppl Scotland resulting in a standard liquid litre price of 26.39ppl

0.9ppl Midlands & East Wales resulting in a standard liquid litre price of 26.7ppl

0.5ppl Lake District resulting in a standard liquid litre price of 26.98ppl

0.5ppl Haverfordwest resulting in a standard liquid litre price of 27.77ppl, please note this price includes the 0.67ppl Tesco cheese supplement

 

First Milk’s B prices for August deliveries is 25ppl.

 

1.5ppl milk price increase for suppliers Yew tree Dairy (AKA Woodcocks) - from August 14th   (21st July 2017)

This takes producers standard liquid litre price to 29ppl (www.milkprices.com)

 

1.0ppl milk price increase for suppliers Paynes Dairies - from August 1st    (21st July 2017)

This takes producers standard liquid litre price to 28.45ppl (www.milkprices.com)

 

0.81ppl milk price increase for Arla members - from August 1st   (21st July 2017)

This is actually a 1 Euro Cent per kg increase, which equates to 0.81ppl and results in a standard liquid litre price of 28.82ppl and a standard manufacturing litre price of 29.98ppl.  Arla’s organic price is a stand on at 42.83ppl.

 

1ppl milk price increase for suppliers to Dairy Crest Davidstow - from September 1st    (21st July 2017)

This 1ppl increase will be a big disappointment to 360 producers who are now firmly well off the pace.  The reality is that Dairy Crest and the producer group DCD reached an agreement in April 2017 for 2 further price drops in June and July and then having assessed the market decided to agree to a price hold until 1st October.

 

Dairy Crest could have held firm until 1st October and refused any price increase but the lesson for DCD to learn is the difference between a price hold and a price floor.  Had DCD agreed that the July reduction would have been the last reduction then further increases would have undoubtedly have flowed because a flaw would not prevent price increases.

 

The situation leaves DCD and Dairy Crest with much head scratching when it comes to negotiating the 1st October price at the end of August.  The increase for 1st October will have to be significant and if it isn’t agreed our understanding is that deadlock would mean that Dairy Crest producers could leave on 3 months notice and that would be a situation that Mark Allen and his team will not want to take a chance on. 

 

In the latest addition of Dairy Industry Newsletter, Barry Wilson has described Dairy Crest and its price movements as “shameful”, especially given the profits in the cheese business are up 18% to almost £43million for the year to March 2017.  Wilson says that operating margins at this level are both the highest in the UK cheese sector and probably in Dairy Crest’s history.  For August it seems that Dairy Crest will be at the bottom of the milk price league tables and Wilson goes on to highlight that Mark Allen’s salary for 2016-17 at £1.344million with share options worth £5.2million.  Wilson then closes his article with a very hard hitting statement that if he was a Davidstow supplier he would be looking elsewhere if this is how he was being treated.

 

It remains to be seen how tough DCD are in the next round of negotiations but for sure if Dairy Crest don’t play their cards right they could be in for a bruising.

 

Arla unanimously vote to move to 12 months notice period   (21st July 2017)

At a meeting this week 94% of Arla representatives voted for UK members to be given a 12 month notice period option with only 6% voting against the resolution.

 

First Milk price contract changes   (21st July 2017)

First Milk have decided to abandon A and B pricing following the lead of several other milk purchasers.  This decision is one of several  outcomes of a pricing review, which started in March. 

 

While some farmers will understandably criticise the move on the basis that B pricing now should be very high, it has to be balanced by the fact that First Milk’s B price for July is only  25ppl and off the pace.  The reason for this appears to be that First Milk don’t have any  surplus milk with all their member’s milk required for their core business contracts.  In fact when questioned First Milk claim that they are now buying milk from third parties for short term opportunities  far more often then they are selling surplus. 

 

The co-op believes that the one price offering will be welcomed by the majority of members, especially now that it is accompanied by a simple 0.5ppl production bonus paid on all litres if the amount produced in one month is equal or greater to the corresponding month 12 months earlier.  This is simply a statement by First Milk that they want to encourage members to deliver more milk.

 

Another change is that the individual transport/haulage charges have been removed from 1st September.

 

First Milk have also stated that during the course of next week the expectation is that they will be announcing another  price rise.

 

3 new board members at Muller    (21st July 2017)

At Tuesday’s farmer forum meeting there were 8 farmers put forward for 3 positions on the Muller farmer board.   Roddy Catto, as chairman and board member, lost his position as did Chris Willis.  Grant Hartman was the only one of the 3 candidates to retain his position and he is now joined by John Hocknell and Stephen Foster.

 

4 other places taking it to a total of 7 are up for election next year.   At the next meeting in August the farmer forum will need to elect a chairman, vice chairman and finance officer and the odds on favourite to take the position of chairman must surely be David Herdman who is the current vice chairman of the group and former chairman of DCD

 

32ppl equivalent milk price for July deliveries paid by Friesland Campina   (14th July 2017)

Having announced a July farm gate price increase of 0.5 Euro Cents per 1kg, www.milkprices.com have calculated that at current exchange rates of 1 Euro = 88.2ppl and converted to our standard liquid litre results in a price paid of 31.858ppl.  This represents an increase of 12.1ppl compared to 12 months ago.

 

Using the same numbers the Friesland Campina organic standard liquid litre price equates to a farm gate price of 42.976ppl.

 

Arla members are encouraged to discuss the proposal to move to a 12 months notice period    (14th July 2017)

Arla members have been given the minimum required 10 working days notice to consider and express any views on the proposed resolution for the immediate removal of the 3 month notice to leave period to be replaced by a 12 month period as proposed and promoted by the UKAF Board.  

 

Several Arla members have contacted Ian during the week questioning the move with some suggesting that an immediate jump from 3 months to 12 months should have been staged with a 6 month interim notice period.  It was the UKAF Board who made the decision to go in one jump.

 

The main bone of contention appears to be the minimum short 10 working day notice period, which for some, is leading to speculation and suspicion which clearly will be a disappointment to Arla.  This is especially the case given the fact that if this is voted through next Thursday (20th July) the 12 month notice period will take effect immediately.

 

Some farmers believe the option for a farmer to leave a milk purchaser in 3 months keeps that purchaser sharp and focussed on the real market place.  As it stands today all of the main GB milk purchasers who do not comply with the Voluntary Code are on a 12 month notice period as are some of the Code compliant purchasers.  Only Muller, Dairy Crest and Parkham Farms currently operate a 3 month notice period on a price change.

 

Notices for Arla farmers in Denmark and Sweden vary from 4 months to 16 months depending on when the farmer submits his notice.  Note, Arla’s plan is to standardise notice periods across all countries during the next 2 years.

 

One thing is clear, in the event a number of Arla farmers were to leave having given only 3 months notice it potentially results in the remaining members having to plug any hole with the business often having to acquire expensive spot milk, which ultimately reflects on the milk price paid to the remaining members.

 

Arla farmers are urged to raise any concerns and discuss the implications of the resolution with their local area representative at the earliest opportunity and ahead of Thursday’s vote.

 

Set of Triple Gang Mowers for sale on Ebay   (14th July 2017)

Item No. 272749726027 in excellent condition and fully serviced.  Ends this Sunday (16th) at 19:00 hours. 

https://www.ebay.co.uk/sch/i.html?_nkw=272749726027&ssPageName=GSTL

 

1ppl milk price increase for suppliers to Belton Farm (Cheese) - from 1st August    (7th July 2017)

This takes producers’ standard manufacturing litre to 29ppl and the liquid standard litre to 28.25ppl (www.milkprices.com)

 

1ppl milk price increase for suppliers to Helers Cheese - from 1st August    (7th July 2017)

 

 

1ppl milk price increase for suppliers to Meadow Foods - from 1st August (PRODUCER NOTIFIED)    (7th July 2017)

This takes producers’ standard liquid litre to 28.15ppl (www.milkprices.com)

 

0.328ppl Muller retail price supplement to be paid on June deliveries    (7th July 2017)

 

NFU accuse Arla CEO of scaremongering   (7th July 2017)

Peder Tuborgh, CEO of Arla has hit the news today with his comments that "butter and cream will be very short at Christmas time" and "Buy your butter now".

 

Tuborgh was interviewed live by BBC Business Live and Radio 5 Live where he pointed to a reduction in milk production coupled with the move from spreads back to real butter following confirmation from scientists that eating butter is not responsible for clogging up arteries. Suddenly butter is popular.

 

Only last week in this bulletin Ian commented "retail butter prices have not responded to hit consumers pockets yet".

 

One year ago a 250 gram pack of butter cost £1.35 now it's £1.49 but it must surely be set to head towards £2 or more soon.

 

A powerful, but perhaps realistic, warning from the head of one of the world’s dairy giants.

 

The big surprise was the revelation that one or more of the interviewers was told by the NFU that Arla were scaremongering in relation to suggestions that butter and cream will be short.

 

According to current wholesale market prices butter and cream are ALREADY short and very soon retailers will have to pass on increases to consumers.

 

For the NFU to comment like this smacks of an industry where its left hand doesn’t know what its right hand is doing, achieved nothing and looks to be a case of negatively counteracting Arla's message just for the sake of it.

 

The division comes at a critical time when the industry needs to be joined in its thinking, especially with the Brexit negotiations.

 

1.5ppl milk price increase for suppliers to Grahams Dairies (Scotland) – from 1st August   (6th July 2017)

This takes producers standard liquid litre price to 27.75ppl (www.milkprices.com)

 

1.5ppl milk price increase for Muller suppliers – from August 1st    (30th June 2017)

The resulting liquid standard litre price is 27.69ppl. 

 

Note, the current 0.3ppl June and July forecast retailer supplement will reduce and could potentially disappear which will mean a reduction in Muller’s farm gate milk price.

 

1ppl milk price increase for Arla directs – from 1st July    (30th June 2017)

This takes the liquid standard litre milk price up to 26.0ppl and the manufacturing standard litre price to 27.04ppl (www.milkprices.com)

 

1ppl milk price increase for suppliers to Glanbia Cheese – from August 1st    (30th June 2017)

This results in a standard manufacturing litre milk price of 29ppl and a 0.96ppl liquid equivalent price rise resulting in a standard liquid litre milk price of 28.03ppl (www.milkprices.com)

 

0.75ppl unconfirmed price increase for suppliers to South Caernarfon Creameries Limited – from August 1st    (30th June 2017)

The price increase is strongly rumoured but no one from SCC was available to confirm it as correct.  If it is confirmed it will result in a 29.28ppl standard manufacturing litre milk price.

 

0.21ppl milk price increase for Tesco (TSDG) Muller and Arla suppliers – from August 1st    (30th June 2017)

This results in a standard liquid litre price of 29.58ppl.  The increase follows a quarterly review of the cost tracker.

 

As markets are the liquid standard litre milk prices for both Arla and Muller non aligned should comfortably overtake the TSDG price during this quarter.

 

First Milk B price +1ppl but stand on for July A price     (30th June 2017)

First Milk’s member B price will increase by 1ppl to 25ppl from July 1st whereas the A price will be stand on until 1st August.

 

29.5ppl net milk price for March to June 2018!     (30th June 2017)

www.milkprices.com UK Milk Futures Equivalent (UKMFE) forward curve is indicating what they describe as “the opportunity” to lock into a net farm gate milk price of around 29.5ppl for the March to June 2018 period.  This must surely mean much head-scratching by farmers as to whether they commit a percentage of their milk at these prices to hedge their bets.

 

In a similar tone the current average UKMFE net price to producers stands at at 29.34ppl allowing for costs, margin and level of risk. (www.milkprices.com)

 

But who’s pickpocketing the money?    (30th June 2017)

NFU Scotland have issued a news release titled “Dairy Farmer Patience Wearing Thin” pointing to the fact market indicators are meteoric yet farm gate prices have failed to respond and that “the arithmetic does not add up”. 

 

As one industry analyst commented to Ian this morning some liquid milk purchasers need to up their game if they want to retain their milk pool and at current July and August 1st farm gate prices its’ likely some farmers will vote with their feet and tender resignations.

 

AHDB Dairy butter prices are at record levels averaging £5,100 tonne (June) and hitting £5400 to £5500 tonne.  In addition, AMPE at 36.4ppl and MCVE standing at 36.9ppl are both close to doubling in value in only 12 months.

 

Questions are being asked as to whether current butter prices are sustainable and the answer appears to be it’s doubtful, especially given the fact retail butter prices have not responded to hit consumers pockets yet. 

 

The AMPE price of 36.4ppl for June should have Barbers suppliers smiling because the Barbers above base milk volume price is set at AMPE minus 2ppl = 34.4ppl, with their standard milk price remaining the top milk for cheese price in the UK (www.milkprices.com)Let’s play Top Trumps and see who can beat that?

 

A big thank you to all who sponsored Ian & Carole in their classic Mini Cooper S trip to Holland in March     (30th June 2017)

Thanks to the generous sponsorship of readers of this bulletin Ian and Carole raised £3630 in aid of Orchid (fighting male cancer) and Against Breast Cancer.

 

In fact, they also collected the prize for raising the most money so a big thank you to all of you who generously supported the tow charities.

 

The total raised by the Regis Ladies Classic Group in their 20 years of annual tours is a staggering £565,000

 

1.65ppl (2 Euro Cents) milk price increase for Arla members – from 1st July    (23rd June 2017)

The increase was inevitable given the seismic movements in the fat markets, which are now driving prices north with spot prices having hit 36ppl.  Other milk processors are expected to follow with “useful and meaningful” price increases next week from July 1st and those announced for August 1st will need to be greater if they intend to be fair to farmer suppliers.

 

The nett Arla price increase is actually 1.44ppl allowing for the currency smoothing and re-balancing of Arla’s cash flow following the milk price support given in May and June when the UK Arla farmers board agreed to fast forward future currency smoothing benefits due from 1st July.

 

The resulting liquid standard litre price is 28.03ppl with manufacturing 29.17ppl and the organic manufacturing standard litre price increases to 42.83ppl and the organic liquid standard litre price to 39.78ppl.  (www.milkprices.com)

 

GDT down 0.8%     (23rd June 2017)

It’s the first auction decrease for three months with the average price recorded $3434.

 

Notable movers:

 

Cheddar            down     3.8% to average US$4121 tonne

WMP                down     3.3% to average US$3022 tonne

SMP                 up         1.4% to average US$2218 tonne

Butter               up         2.9% to average US$5768 tonne

 

Dairy UK Beyond Brexit Seminar and comments from EU Commissioner, Phil Hogan     (23rd June 2017)

Wednesday’s gathering of the great and the good of the UK dairy industry certainly confirmed that Dairy UK is pulling all the stops out to ensure the UK dairy industry, at both processor and farmer level, is recognised as a key priority in the Brexit negotiations.

 

Commissioner Phil Hogan spoke in the evening and gave very positive signs that he wanted to work with the UK dairy industry to ensure a soft Brexit.  Yes, the cynical will likely comment that Hogan will want a soft landing given his Irish roots but he had the perfect opportunity to deliver a hard hitting warning to the UK dairy industry and he chose to deliver the opposite message of wanting to work together.

 

Chairman of Dairy UK, David Dobbin, was very clear that trading with the EU without tariffs and barriers must continue and that now is the time for the industry to “hammer home the significance of dairy”.

 

Dobbin went on to highlight that the UK food and drink industry is bigger than the car and aerospace industry combined with 73,000 UK families depending on the 14 billion litres of milk output from dairy farmers.

 

The thinking and the messages from Dairy UK were very clear, let’s hope their efforts yield results and we don’t end up on the cliff edge in the spring of 2019.  At least we now know we have a dairy organisation fighting our corner.

 

Yew Tree concludes its first 2 year fixed price contract    (16th June 2017)

This is certainly the UK’s first 2 year forward contracted farm gate milk price which, like Yew Tree’s other volatility smoothing initiatives, has had a good update.  It has been taken up by a number of Yew Tree Dairies ingredients farmers and backed off with the physical delivery and contracts with customers, so zero exposure.

 

The contracts will run until July 2019, so covering two more spring flushes, and at farm level delivers is 29.028ppl less 1.7ppl haulage to nett 27.328ppl.

 

Yew Tree producers have contracted to supply between 5% and up to 60% of their output and this price certainly top trumps the average all prices figure for the last 2 years (24.67ppl) and 3 years (26.66ppl) (www.milkprices.com)

 

Production and Markets – Update   (16th June 2017)

According to Datum GB milk deliveries for week ending 3rd June 2017 were 1.5% below those in the corresponding week a year earlier. 

 

Worldwide there is no increase in milk production which is running more or less in parallel with that recorded in 2016.

 

Commodity wise all prices continue to head North with the rise in butter prices has been described as “meteoric!”  All eyes will be on next week’s GDT auction with the expectation that once again all prices will increase.  This market is simply a commodity and fat market driven.

 

Vegan groups turn sour as European Court says not to Soya Milk and others    (16th June 2017)

The European Court of Justice has declared that products advertised as milk, butter, cream, cheese and yoghurt cannot be named as such if they are purely plant based.

 

This means in order to use these words in advertising and marketing any milk/dairy product must be derived from animals.  The court’s decision follows a German case.

 

It’s a bitter blow for the European Vegetarian Union and The Vegan Society and their mates, who when asked to comment were all keen to put their own spin on the decision rather than keep their heads down and lick their wounds.

 

0.5ppl milk price increase for members of South Caernarfon Creameries (SCC) co-operative – from 1st July   (5th June 2017)

At a time when most, if not all, milk purchasers are at best holding prices with most reducing Wales oldest dairy co-operative, SCC, is bucking the trend and not following the pack with this 1st July increase.

 

Alan Wyn Jones, MD of SCC, commented to Ian:

 

Cheese by-product returns on cream and whey have continued to strengthen and the outlook on these returns remains extremely positive.  On the back of these improved returns its only right we pass this onto our farmer members

 

The SCC business has made significant investment in recent years and is one of the few milk purchasers in a position to attract and recruit new suppliers/members. 

 

The increase takes producers manufacturing standard litre upto 28.53ppl and their liquid standard litre price to 27.57ppl (www.milkprices.com)

 

0.35ppl and 0.28ppl milk price reductions for members of First Milk – from 1st June    (5th June 2017)

Details as follows (www.milkprices.com):

 

0.35ppl              Midlands & East Wales (liquid standard litre price of 25.80ppl)

 

0.35ppl              Scottish mainland (liquid standard litre price of 25.49ppl)

 

0.28ppl              Lake District (liquid standard litre 26.48ppl and manufacturing 27.43ppl)

 

0.28ppl              Haverfordwest (liquid standard litre 27.25ppl and manufacturing 28.20ppl)

 

The First Milk B price for May is 23ppl, June expected to be 24-25ppl and prediction for July 25ppl plus.

 

The reason given for these price cuts is as a consequence of other milk purchasers reducing their prices, which has adversely impacted on First Milk’s customer pricing mechanism.

 

Markets continue to head North  (5th June 2017)

Throughout May dairy markets for butter, cream and AMF have been aggressively heading up and this has continued into June and are now at their highest levels for more than 5 years.

 

Current spot milk prices are now at 30ppl and in Holland and Italy are 31.5ppl (note this is with 4.4% b/f)

 

www.milkprices.com’s UK Milk Futures Equivalent increased by an eye-watering 8ppl in May to 35.39ppl for September 2017 delivery.  (Note, approximately 3 to 4ppl needs to be deducted to give a realistic farm gate milk price equivalent.)

 

AHDB Dairy report butter starting in early May at £3750 tonne and ending at £4800.  Cream started at £1700 and reaching £2200 tonne

 

Open Farm Sunday – This week 11th June   (5th June 2017)

LEAF has 350 UK farms signed up for this week’s Open Farm Sunday in this, it’s 11th year.

 

As LEAF correctly state it’s a fantastic opportunity for young and old to discover first hand what it means to be a farmer.

 

Arla are the only UK milk processor who provide financial support and sponsor the event and more than 60 Arla member farms are opening their gates to the public this Sunday.  A great effort and well done to all who make this happen.

 

South Caernarfon Creameries (SCC) wins the 2017 Dairy Food Provider of the Year Award   (5th June 2017)

The award was voted by members of the public and a real feather in the co-op’s cap.

 

0.4ppl milk price reduction for Arla members – from 1st June     (26th May 2017)

This takes producers’ standard litre liquid milk price to 26.65ppl and 27.73pl for the standard litre manufacturing price (www.milkprices.com)

 

The price cut is obviously unwelcome, especially when it only applies to Arla’s circa 2,500 GB members, however, its GB members did avoid a cut as a result of the accelerated currency smoothing payment, which neutralised a May price cut.

 

However, the NFU (England & Wales) appear to have Arla in their sights and turning almost a blind eye to making any meaningful comment on the practices and milk price reductions of other milk purchasers, especially County Milk.  See last week’s bulletin with 1ppl retrospective producer price cut.

 

As the biggest milk purchaser Arla should expect to receive adverse press coverage when they drop the price, however, numerous people are questioning why the NFU haven’t done a press release lambasting County Milk’s 1ppl backdated price cut which effectively waves two fingers to the Dairy Industry Voluntary Code of Best Practice and firmly takes the industry back to the dark days, pre the code.

 

So whilst the NFU claim “farmers are asking what’s going on” reference the Arla 0.4ppl cut Ian can confirm others are asking what’s going on with regards to the NFU applying pressure proportionally, especially when it comes to retrospective price cuts on which it has simply made a passing remark.  The NFU could do much better unless it has been silenced!

 

MCVE & AMPE both comfortably over 30ppl   (26th May 2017)

The AMPE price for May is up 3.3p in one month to 31ppl and the corresponding MCVE price up 1.5p to 33.3ppl.

 

Fonterra price increase    (26th May 2017)

New Zealand dairy giant Fonterra has increased its 2016/2017 farm gate milk price by 15 cents to $6.15 per kg MS as a result of stronger world dairy commodity prices and is cautiously optimistic for the future.

 

EU milk out put is rising faster than budgeted    (26th May 2017)

March output is up just under 1% across the EU and the growth is predicted to increase by significantly more than the budgeted forecast increase of 0.6% for the year, especially for the second half of 2017 where anticipated growth now expected to be 2%.  This would give a total 2017 increase of around 1%.

 

Arla’s cheese isn’t made from Monster Milk    (26th May 2017)

Arla has rattled some cages in Trumpland with a racy and controversial advertisement on US TV promoting Arla’s cheese as not being made from cows which are monsters and given added hormones.

 

The advert depicts a six-eyed monster with razor sharp horns and electrified fur representing a child’s impression of the hormone BST.

 

BST manufacturer Elanco has initiated legal action against Arla demanding the advert be pulled but as of today it’s still running and gaining more publicity everyday, which must be great news for Arla’s US cheese sales.  The jury is out on whether the advert is pulled on the instruction of the authorities.

 

New look to Belton Cheese branding   (26th May 2017)

Shropshire farm house cheese buyer, Belton, has unveiled a new very distinctive identity under the name of Belton Farm with a strapline “Great British Cheesemakers”

 

1ppl back dated milk price reduction for County Milk suppliers – from May 1st     (19th May 2017)

This means County have dropped producer prices by 3ppl in recent months and this latest price drop has come as a very big surprise to producers because for those involved at the sharp end of trading, like County, spot prices are now 26 to 27ppl having risen from around 20ppl in less than 3 weeks. 

 

Despite all the efforts of the NFU’s and others to introduce a code of conduct it’s hardly fair to hear back dated price cuts are still considered fair.

 

Farmers should certainly be questioning any price drops beyond early May and for those announced for June and even July, for example Dairy Crest’s two stage price reduction, there must be grounds for farmers to insist these to be immediately rescinded to demonstrate fairness and transparency.  The alternative is some purchasers risk being tagged as opportunist Robin Hoods, especially for July and/or back dated cuts.

 

It’s a certainty some milk purchasers have made the wrong call with recent milk price drops and should be challenged.

 

Cream income is stratospheric and according to AHDB Dairy is worth 10.15ppl compared to only 4.62ppl 1 year ago an increase of 120% and cheese prices are rocketing north this week.  Come on don’t push through price cuts just because you can.

 

0.5ppl milk price drop for Grahams Dairies supplies – from June 1st      (19th May 2017)

This takes producers standard liquid litre price to 26.25ppl (www.milkprices.com)

 

GDT auction results   (19th May 2017)

This weeks’ GDT auction produced a 3.2% all products average index increase, which is the 5th consecutive increase.  Out of the 8 commodities on offer 7 out of 8 recorded price increases and the average index is now the highest it’s been for 3 years.

 

Key movers    (19th May 2017)

Butter               +11.2% to average US$5479

WMP                +1.3% to average US$3312

SMP                 +1.0% to average US$1998

Average +3.2% to average US$3313

 

UK product goes into Intervention     (19th May 2017)

According to AHDB dairy UK produced SMP has gone into the EU’s Intervention store for the first time in 12 months during the first week of May with 1,132 tonnes taking total EU stocks to an eye-watering 356,000 tonnes!  Do not let anyone try to tell you that SMP prices are why price cuts are needed because cream values are eclipsing that red herring.

 

The liquid milk merry-go-round kicks in as Morrisons do some shuffling    (19th May 2017)

Morrisons have moved to sole supplier for all their own brand liquid milk, estimated to be around 400 million litres to Arla from March 2018 for three years until 2021. 

 

Arla already had an estimated 260 million litres and the 140 million litres which they gain from next March is at the expense of Muller and is in effect the 140 million litres Muller acquired as part of the take over of Dairy Crest’s liquid division. 

 

Whilst Morrisons are unlikely to go to a segregated pool they are moving towards what some would call a nominated pool with specific farmers nominated with whom Morrisons will presumably want to engage in return for which additional funds will be paid to the retailer.

 

The loss of such a large quantity will be a blow to Muller as it would be to any processor.

 

More rides on the merry-go-round are still on the cards with next up the outcome of the Lidl re-shuffle followed by the big Aldi tender and in summer by the co-op group (CTRG).  Nett milk movements during the 12 months ending April 2018 will undoubtedly leave some milk buyers smiling and some crying over the spilt milk.

 

Dairy Crest’s year end results    (19th May 2017)

Dairy Crest’s results show adjusted profit was up 5% to over £60 million (57.7m in 2015/2016) with net debt up by 9% to £249.8m.

 

The dividend paid to shareholders up 2% to 16.3p.

 

Dairy Crest shares were trading at £5.80 a fall from the £6.16 briefly recorded on Wednesday.

 

Ulster Farmer’s Union retaliates against Go Vegan World’s anti-dairy campaign     (19th May 2017)

UFU President Barclay Bell has no issues with the less than 1% of the population who for whatever reason have decided to go vegan, however, their organisations anti-dairy campaign targeting dairy farming systems is “one-sided and unfair”, which the President has criticised on behalf of the 99%  plus of the population who enjoy eggs, meat and dairy products.

 

Meanwhile, in the US, an industry campaign called Undeniably Dairy has been launched to better engage with consumers with clear transparent messaging about dairy products which has and is currently twisted, distorted and misrepresented!

 

The campaign realises that consumers are being spoon fed what is predominantly conflicting inaccurate information often by anti-dairy groups.  The same could be said in the UK, especially when it comes to facts on TB in cattle and badgers.

 

Fake invoices and forgery once again in the Midlands     (19th May 2017)

It’s by no means the first time middle ground family wholesaler J N Dairies has been the subject of unlawful activities (2008) lies and propaganda (2014) and its returned to their doorstep again.

 

No fair and honest dairy competition in the Wolverhampton and Birmingham area that’s too simple and now it’s the return of doctored documents painting “an untruthful image of your honest and ethical supplier.”  When will these clowns learn this is not how the dairy industry operates in the UK?

 

Back in 2011 Johal Dairies and J N Dairies were locked in a multi-million pound expensive high court battle involving the theft of confidential information belonging to J N Dairies in 2008 and an alleged bribe of £40,000 plus.

 

The end result was that the court ordered Johal Dairies to pay J N Dairies almost £1.3 million in relation to legal costs, damages and interest on top of which they had their own costs.

 

Arla opens new Danish innovation centre     (19th May 2017)

As part of its aim to ensure a minimum of 10% of Arla UK’s net revenue is derived from new products Arla has officially opened its new innovation centre in Aarhus, Denmark.

 

The site employs 150 people some of whom will, with respect, resemble Umpa Lumpa’s working on up to 50 new ideas at any one time.

 

Arla in winning ways     (19th May 2017)

Arla have received international recognition having been listed under two ingredients categories in the 2017 Ingredient of the Year Nutra Ingredients Awards in Geneva, winning one category and runner up in another.

 

0.5ppl milk price reduction for Muller non-aligned suppliers – from 9th June   (12th May 2017)

This reduces producers’ standard liquid litre to 26.19ppl (www.milkprices.com) excluding the retailer supplement (see below)

 

0.276ppl April retailer supplement for Muller non-aligned suppliers   (12th May 2017)

This will be paid to Muller’s non-aligned suppliers in addition to the standard price.

 

The consensus is that dairy markets have turned the corner   (12th May 2017)

Virtually all analysts are convinced that the bottom of the market was reached in April and that the UK farm gate milk price outlook for the remainder of 2017 is cautiously optimistic.

 

GDT auction futures and forward contract prices having stabilised are now showing signs of steadily improving for most dairy commodities.  This is encouraging news in spring and bodes well for the rest of 2017.

 

The FC Stone/milkprices.com UK milk futures (UK MFE) price for April of 27.36ppl they believe will be the lowest for “the foreseeable future” and May has already seen the UK MFE average butter price increase by €150/tonne and SMP up a more modest €10/tonne.

 

The 350,000 plus tonnes of aged SMP Intervention stocks will one day be a problem.  If, or rather when, the Commission accept tenders to release stock it will dampen farm gate milk price recovery.  Fortunately in 2017 limited additional SMP is going into Intervention amounting to under 1,000 tonnes a week placed in store during April compared to 15,000+ tonnes/week average in April 2016.

 

In a press release NFU Scotland have called for stability in Scottish farmers farm gate milk prices.  The press release points to a realistic farm gate milk price of 27.5ppl depending on the milks end use based on the fact that AMPE is at 27.7ppl and MCVE is at 31.8ppl.  All signs are pointing north.

 

Dairy Industry Newsletter 20th Annual Conference – Next Wednesday   (12th May 2017)

The Conference theme is “Riding the Dairy Market Roller Coaster Trump, Brexit and many now uncertainties”.  Ian will be attendance to hear first hand what an impressive line up of speakers has to say.

2ppl milk price cut for Dairy Crest Davidstow suppliers    (5th May 2017)

Split over two months with a 1ppl reduction from 1st June and another 1ppl from 1st July.  Accompanying the announcement was a pledge to hold the new July price for August and September.

 

First Milk May 1st price reductions    (5th May 2017)

Details are as follows:

 

0.1ppl               Midlands & East Wales (liquid standard litre price of 26.15ppl)

0.25ppl              Scottish mainland (liquid standard litre price of 25.84ppl)

0.35ppl              Lake District (liquid standard litre 26.76ppl and manufacturing 27.72ppl)

0.35ppl              Haverfordwest

 

The 0.35ppl Haverfordwest liquid standard litre price will be 25.88ppl excluding the additional Tesco cheese payment, which is expected to result in a standard litre price of 27.53ppl and a manufacturing standard litre price of 28.5ppl.

 

Muller sign up all 1900 suppliers bar 6!    (5th May 2017)

In what can only be described as a remarkable 2nd round PR result Muller have confirmed to Ian that only 6 farmers have not signed the new Muller contract.  Out of these only 2 are what Ian describes as “The Awkward Squad” with the other four either retiring or moving away from the Muller family.

 

So following on from Ian’s current Dairy Farmer article the two Awkward Squad farmers are the ones with a big call and a potential problem unless they have decided their future is in not supplying Muller and they already have alternative options.

 

Consequently there is unlikely to be any need for differential pricing for just two farmers on the old contract and www.milkprices.com will presumably ignore and no longer refer to either of the old Muller contracts.  So far as Muller is concerned it’s a housekeeping job completed.

 

Dairy Tech has 100 plus exhibitors already   (5th May 2017)

RABDF’s new flagship Dairy Tech event on 7th February 2018 at Stoneleigh Park already has over 100 committed exhibitors – www.rabdf.co.uk

 

Scottish NFU’s Vice President calls for naming and shaming of BVD farmers who fail to take action  (5th May 2017)

It’s a bold and brave move but Gary Mitchell who is a dairy farmer and NFU Scotland Vice President has put forward the suggestion that farmers who fail to eliminate cattle persistently infected with BVD should be publically named and shamed.

 

According to Gary and NFU Scotland there are 382 known BVD PI animals on Scottish farms and 140 farms have two or more PI’s and one even has a staggering 24 PI animals on farm!

 

Gary is suggesting that if these farmers are unwilling to remove all infected animals their details should be published and Ian would support this with publication in this bulletin on a weekly basis if data protection permits it.  See below for very competitive BVD tags from Potters.

 

No reduction in EU SMP stocks in 8th tender    (28th April 2017)

Once again no SMP sold in the recent tender and stocks are indeed steadily rising and currently stand at 353,680 tonnes. Current market prices for SMP are precariously close to intervention levels.

 

Friesland Campina stand on for 3rd time    (28th April 2017)

Arla’s biggest European competitor, Friesland Campina, has held its producer milk price for the 3rd consecutive month at an equivalent 29.24ppl based on the milkprices.com standard liquid litre price (4% butterfat & 3.3% protein). Note, the rise in the value of sterling has wiped 1ppl of this price which would have been 30.25ppl were it not for currency movement.

 

MACHINERY WANTED – All must be in very good or excellent condition   (28th April 2017)

1.     Around a 3 metre mower (no conditioning unit)

2.     A 1500 to 2000 gallon slurry tanker c/w dribble bar

3.     A 25 foot or longer bale trailer (braked)

Email ianpotter@ipaquotas.co.uk

1 Euro Cent (0.76ppl) milk price reduction for Arla members is neutralized for Arla GB members     (25th April 2017)

From next Monday May 1st Arla has announced a further 1 Euro Cent milk price reduction but this has been neutralised in cash flow terms due to a decision by the UK Arla farmers board to bring forward future currency smoothing benefits due to members July onwards.  The nett effect is to cancel out the price cut at a time when cash flow is already tight due to peak seasonality deductions and is a welcome move by the UK farmer representatives and fingers crossed for the next Arla price move to be stand on or up.

 

2 Euro Cent (1.52ppl) milk price reduction for Arla Organic members is halved    (25th April 2017)

The accelerated benefit of July currency smoothing has also been applied to the organic price reduction of 2 Euro Cents, which means the net cash flow reduction will be 1 euro cent (0.76ppl) instead of 1.52ppl for a standard liquid litre and on a standard manufacturing litre the 1 euro cent reduction converts to 0.79ppl as instead of 1.58ppl both apply from May 1st.

 

In a statement Arla commented that whilst the organic dairy market is reasonably stable this adjustment has been necessary in order to reflect current market returns.

 

0.296ppl addition for Muller non-aligned March deliveries retail supplement    (14th April 2017)

Muller’s non-aligned suppliers will receive an additional 0.296ppl on all milk delivered in March

 

No takers at latest Dutch Dairy Commodity auction   (14th April 2017)

According to a report in DIN, the Dutch based dairy auction’s online recorded no sales for a second 2017 auction for a total of 451 tonnes on offer.  The minimum price set for SMP was £1680 tonne.

 

Meanwhile, SMP prices continue to fall with prices, according to AHDB Dairy, trading at €1790 tonne just €92 above Intervention levels.  More SMP has gone into Intervention from Poland, Germany and Lithuania with an additional 1200 tonnes going into already record quantities in store.

 

Arla confirms a 12 million Euro investment in baby powder     (14th April 2017)

Arla has confirmed plans to invest 12 million Euros to produce infant milk formula at its AKAFA site in the north of Denmark.  The facility is planned to be operational by August 2018 and interestingly with technology will only create an additional 2 or possibly 4 jobs.

 

0.32ppl milk price increase for suppliers aligned to the co-op Dairy (Muller) – From 1st May    (7th April 2017)

This increase is for the next quarter May to July inclusive and takes producers standard liquid price to 27.9ppl. (www.milkprices.com)  

 

Crediton Dairy stands on with its suppliers ex-farm gate milk price – until the 1st June which maintains the current standard liquid litre price at 28.5ppl.  (7th April 2017) (www.milkprices.com)

Crediton’s B litre milk price will change from May 1st to AMPE minus 2ppl as opposed to the current AMPE minus 1ppl.

 

1.25ppl milk price cut for Barbers suppliers – From 1st May     (7th April 2017)

This takes producer’s standard manufacturing/cheese litre price to 29.05ppl and 28.85ppl for a standard liquid litre (www.milkprices.com)

 

0.75ppl milk price cut for Pensworth suppliers     (7th April 2017)

This takes producers standard liquid litre price to 26.5ppl. (www.milkprices.com)

 

0.4ppl milk price cut for Meadow Foods suppliers – From 1st May    (7th April 2017)

The reduction results in a standard liquid litre price of 27.15ppl and a standard manufacturing (cheese) litre price of 27.53ppl.

 

Freshways milk price cut is unknown but will be capped at a maximum 0.39ppl for May suppliers       (7th April 2017)

Freshways wrote to its producers on the 31st March informing them of a May price cut claiming that all 5 companies which make up the Freshways current basket have reduced their price. 

 

Ian has requested Freshways clarify which Companies have reduced the basket price because as at the date of the letters Ian believes a maximum of 2 out 5 have reduced their farmgate milk price (Arla and Paynes).  Indeed the attachment with the letter appears to confirm this.  The price cut will not exceed 0.396ppl.

 

GDT Auction average up 1.6%    (7th April 2017)

Noteable movers were:

 

WMP up           2.4% to average US $2924 tonne

SMP down       0.8% to average US $1913 tonne

Butter down     1.8% to average US$4751 tonne

Cheddar down 4.4% to average $3288

 

More SMP goes into Intervention    (7th April 2017)

It’s not encouraging news to hear that 472 tonnes of SMP from Poland has already gone into intervention stores.

 

Southern Irelands February milk production was down 7.8%     (7th April 2017)

Southern Irelands February production was down 22.3 million litres (-7.8%).

 

Award for the most money raised for UK Cancer Charities      (7th April 2017)

 

Ian & Carole scooped the award for being the team (English Bulldogs on Tour) which raised the most money for the two Cancer charities in last weekend’s final Regis Classic car Tour to Holland.

 

So a huge Thankyou to the 62 readers who donated. Note a very significant proportion of the money Ian and Carole raised was directed by readers to fighting Male Cancer.

 

Below is a photograph of Ian & Carole receiving their Awards with organiser Ali Green who has been key to the annual event for 20 years. Please note Ali isn’t as squashed and sandwiched between Ian and Carole as the picture perhaps indicates!  Also attached is a great photograph of the duo in action in their 1963 Mini Cooper S running along the canal between traditional Dutch windmills.

 

Ian will confirm how much they raised when the giving page closes but as at todays date it amounts to £2,575 plus £314 Gift Aid. Total £2,889 with more money received by cheque than on line.

 

Ian & Carole’s giving page will remain open for any last minute bulletin reader donations.

If you haven’t sponsored then please give a little now by donating on line by clicking on: http://uk.virginmoneygiving.com/fundraiser-web/fundraiser/showFundraiserProfilePage.action?userUrl=EnglishMiniBulldogsOnTour&isTeam=true

OR

Send a cheque(s), made payable to either:

“Orchid”  (Fighting male cancer)

Or

“Against Breast Cancer”

Please sponsor Ian & Carole where you can, and don't forget you can increase the amount you donate with Gift Aid (individuals only, not companies).

Also a big thankyou to EDP Photo News UK and Steve Carpenter for taking the photographs and allowing us to reproduce them.

 

 

0.62ppl milk price increase for Tesco (TSDG) suppliers – from May 1st   (31st March 2017)

This increase will apply for the next quarter May to July inclusive.  The resulting liquid standard litre price is provisionally expected to be 29.37ppl.

 

0.33ppl milk price increase for Sainsburys (SDDG) suppliers from 1st April   (31st March 2017)

This increase will apply for the next quarter of April to June inclusive and takes producers standard liquid litre milk price to 27.67ppl (Muller supplier) and 27.55ppl (Arla supplier) (www.milkprices.com)

 

1ppl milk price increase for Mullers Organic suppliers – from 1st May   (31st March 2017)

This takes the organic suppliers standard liquid litre milk price to 40.5ppl (www.milkprices.com)

 

Muller stand on for April & May   (31st March 2017)

Muller’s non-aligned milk price is unchanged through the 2017 flush until at least 1st June at 26.69ppl plus an estimated retail supplement of 0.3ppl will give an estimated paid out milk price of 27ppl.

 

Dairy Crest stand on for April & May   (31st March 2017)

Dairy Crest’s farm gate milk price is unchanged through the 2017 flush until at least 1st June at 28.92ppl on the liquid standard litre price and 30ppl on the manufacturing/cheese standard litre price (www.milkprices.com)

 

Friesland Campina stand on for April   (31st March 2017)

Arla’s biggest European competitor, Friesland Campina, has announced a stand on milk price for April.  When this is adjusted to a www.milkprices.com standard liquid litre this converts to 30.251ppl with its comparable standard litre organic price at 40.334ppl.

 

0.35ppl milk price cut for Paynes suppliers – from 1st April    (31st March 2017)

This takes producers standard liquid litre milk price down 27.45ppl (www.milkprices.com)

 

 

This bulletin comes from Holland due to the fact Ian & Carole are now in Rotterdam raising money for Breast Cancer and Male Cancer.

 

If you value this bulletin and you haven’t sponsored then please give a little now by donating on line by clicking on: http://uk.virginmoneygiving.com/fundraiser-web/fundraiser/showFundraiserProfilePage.action?userUrl=EnglishMiniBulldogsOnTour&isTeam=true

OR

Send a cheque(s), made payable to either:

“Orchid”  (Fighting male cancer)

Or

“Against Breast Cancer”

Background  -  Back in 2015 Ian & Carole travelled to New Zealand and joined the Pork Pie Charity Run (www.porkpie.co.nz) in a classic Mini and raised £6,600 for charity.  This weekend the intrepid duo have taken to the wheel again and have driven Ian’s 1963 Mini Cooper S to Rotterdam for a weekend to raise money in the 20th and final Regis Ladies Classic Car Tour.

100% of your donations will go to the two charities named below, as Ian & Carole are self funding all their own expenses, entry fees and accommodation.

This final 20th Regis Classic Tour is supported by a host of companies and individuals who have donated money, prizes, auction items and services to help this group of ladies finish their 20th annual tour with a bang.  During the past 19 years the tour has raised a staggering £524,000. 

Ian, more than anyone, fully appreciates how difficult the past two years in UK dairy farming have been.  If you can dig deep and find a few spare pounds it will all be very much appreciated.  It’s not a competition who can give the most but if you do value this regular bulletin and Ian’s monthly Dairy Farmer article (now 26 years and still going) then please give a little to show your appreciation.

The event is not a charity challenge, but more of a non-competitive social weekend with like minded classic car enthusiasts aiming to have a spring tour at the same time as raising money for two great charities.  I doubt there is anyone who is reading this bulletin who has not had at least one friend or family member affected by cancer.

So please sponsor Ian & Carole where you can, and don't forget you can increase the amount you donate with Gift Aid (individuals only, not companies).

Please donate on line by clicking on: http://uk.virginmoneygiving.com/fundraiser-web/fundraiser/showFundraiserProfilePage.action?userUrl=EnglishMiniBulldogsOnTour&isTeam=true

OR

Send a cheque(s), made payable to either:

“Orchid”  (Fighting male cancer)

Or

“Against Breast Cancer”

Ian’s target was to raise £1000 but already readers generosity has exceeded £2000 by cheque or by online donations.

Thank you all in advance.

1ppl milk price drop for County Milk Products Limited suppliers – from April 1st   (PRODUCER NOTIFIED)     (24th March 2017)

This is the second consecutive 1ppl price drop by County according to its farmer suppliers.  However, according to one source County are exposed to the ingredients market via Yew Tree Dairy, which has certainly crashed back, especially given the fact the SMP price is now close to Intervention level.  The likelihood of spring milk going into intervention stores to add to the existing 350,000 tonnes of old stock is now almost inevitable for April.

 

County were unavailable to confirm what their 1st April standard liquid litre price would be following the 2ppl reduction, which we will endeavour to report next week.

 

0.79ppl (1 Euro Cent) milk price drop bombshell from Arla – 1st April        (24th March 2017)

Around 2,700 Arla members/ owners  have been notified that from April 1st their milk price will reduce by 1 Euro Cent equal to 0.79ppl.  The reduction will not apply to Arla’s UK organic suppliers although Arla’s mainland Europe organic suppliers will feel the full force of the reduction.

 

Of some comfort is the fact the currency smoothing mechanism will provide a 0.37ppl increase resulting in a net reduction of 0.42ppl.  The reduction reduces the 1st April standard liquid litre price, including the currency smoothing adjustment, to 27.03ppl and for the standard manufacturing litre to 28.13ppl.

 

It’s a big blow to Arla members and regrettably if Arla sneeze others will catch a cold.  Pretty much everyone in the industry had expected (or prayed) for a stand on price for April and May, which with the filtering through of the currency smoothing would have seen farm gate milk price increases.  This cut will hurt.

 

There are strong rumours that a similar reduction is already in the pipeline for May 1st coupled with the belief that Arla have overpaid producers for milk, especially the recent 13th payment.  If another cut happens on May 1st Arla will struggle to deal with their farmer communications to justify a second cut.

 

The Arla cut could easily kick start a trend which others seize if it does it will be the final straw for a number of dairy farmers who haven’t even begun to recover from the last slump in prices.

 

Meanwhile, the Arla brands have been named as recording the largest growth out of the top 100 UK grocery brands achieving growth of £37m in 2016.

 

Arla members are already questioning whether achieving such headline grabbing brand growth is actually delivering a better milk price to the farmer owners given that in cheese some of its competitors are now paying 30ppl for milk, which is going into branded cheese.

 

GDT average up 1.7%  (24th March 2017)

 

The most notable price was the dramatic drop in SMP of 10.1%, which followed a 15.5% drop only 2 weeks ago. 

 

The GDT average price for SMP has crashed by an eye watering 24% in just one month.

 

Key movers were:

 

WMP                +2.9% to average US$1948/tonne

Cheddar            +1% to average US$3406/tonne

SMP                 -10.1% to average US$1948/tonne

 

0.79ppl (1 Euro Cent) milk price drop bombshell from Arla – 1st April     (23rd March 2017)

Around 2,700 Arla members/ owners  have been notified that from April 1st their milk price will reduce by 1 Euro Cent equal to 0.79ppl.  The reduction will not apply to Arla’s UK organic suppliers although Arla’s mainland Europe organic suppliers will feel the full force of the reduction.

 

Of some comfort is the fact the currency smoothing mechanism will provide a 0.37ppl increase resulting in a net reduction of 0.42ppl.  The reduction reduces the 1st April standard liquid litre price, including the currency smoothing adjustment, to 27.03ppl and for the standard manufacturing litre to 28.13ppl.

 

It’s a big blow to Arla members and regrettably if Arla sneeze others will catch a cold.  Pretty much everyone in the industry had expected (or prayed) for a stand on price for April and May, which with the filtering through of the currency smoothing would have seen farm gate milk price increases.  This cut will hurt.

 

There are strong rumours that a similar reduction is already in the pipeline for May 1st coupled with the belief that Arla have overpaid producers for milk, especially the recent 13th payment.  If another cut happens on May 1st Arla will struggle to deal with their farmer communications to justify a second cut.

 

The Arla cut could easily kick start a trend which others seize if it does it will be the final straw for a number of dairy farmers who haven’t even begun to recover from the last slump in prices.

 

Meanwhile, the Arla brands have been named as recording the largest growth out of the top 100 UK grocery brands achieving growth of £37m in 2016.

 

Arla members are already questioning whether achieving such headline grabbing brand growth is actually delivering a better milk price to the farmer owners given that in cheese some of its competitors are now paying 30ppl for milk, which is going into branded cheese.

 

SMP Intervention tenders halved as interest plummets   (17th March 2017)

The latest EU Commission SMP intervention stock tender resulted in just two bids for only 136 tonnes compared to bids for almost 20,000 tonnes in December.

 

The current two tender windows each month will be reduced to one and there seems minimal prospect of any product coming out of store unless the EU Commission significantly reduce their minimum price.

 

First Milk add to their trophy cabinet   (17th March 2017)

Last night First Milk won Nestle UK’s Supplier of the Year Award as well as a Nestle Quality Award, both collected by Mike Gallacher.  Both are viewed as further ringing endorsements that the co-op and its members are on the right track with its major customer.

 

50 Muller suppliers to battle it out for 21 forum places    (17th March 2017)

Healthy competition is the order of the day in some of the Muller farmer forum regions with 50 candidates competing for 21 places.  Ballot packs will be sent to members next week with the elected board to be insitu next month when their task will be to represent 1900 Muller suppliers.  Let’s hope the 21 selected have ability to represent their area and it’s not noisy ones with confidence but little ability.

 

TWO DAIRY CEO’s STEP DOWN WITHIN DAYS OF EACH OTHER    (15th March 2017)

 

1.     Mike Gallacher steps down as First Milk’s CEO – Turnaround Job Done    (15th March 2017)

Mike Gallacher is to step down as First Milk’s CEO and turnaround guru in April and into his shoes will step Shelagh Hancock.

 

It’s a near as damn it 2 years to the day since Gallacher was parachuted into First Milk and at the time the co-op was on life support and at best only weeks away from the life support machine being turned off.  It wasn’t quite as bad as DFOB but it was looking like a sick dog which needed putting out of its misery.  The dairy industry’s vultures were circling all eager to pick over the carcase but none wanted to be first to swoop in.  It was a badly run business and the one thing the First Milk board did get right was to re-shape, re-group and give Gallacher a free hand.

 

As Gallacher leaves, he hands over a very different business and whilst it will still have to operate profitably in a challenging environment it’s a fact today there are other UK dairy businesses in worse shape than First Milk.

 

It’s unusual to see dairy CEO’s involved in a smooth planned succession but this is one such case.  Normally it’s a sacking dressed up with lots of spin. 

 

Gallacher’s successor, Shelagh Hancock, has 25 years of experience having been involved with the First Milk business for almost 12 months.  She has previously worked for Glanbia, been a key figure in Milk Link until the Arla takeover and latterly Medina Dairies.

 

Shelagh is essentially a co-op person and will steer First Milk on the same course Gallacher has set with little, if any, need for a change in direction.  There is already at least one new opportunity on her desk for her to explore and plenty of stuff to keep her occupied.

 

It’s almost 2 years to the day since Gallacher took charge and he certainly can claim to have turned around the First Milk business much to the relief of its members who have seen their co-op go from life support to being discharged and sent home in less than 2 years.

 

Next week the two commence on a GB member meeting tour to inform members of the turnaround results, direction of the business, current milk field issues (especially the Tesco field connected to the Haverfordwest factory), farm contract developments/ideas and the opportunity to meet their new CEO.

 

2.     Ronald Kerrs to leave Muller   (15th March 2017)

The departure of Ronald Kerrs as CEO of Muller and the arrival of Uwe Sommer doesn’t appear to have been on the cards for months and part of a smooth succession plan.

 

Kerrs came to Muller in 2012 initially as Head of Muller UK before taking the position of group CEO in 2015.  He has certainly made his mark so far as the UK dairy industry is concerned having been involved in the Dairy Crest liquid business takeover as well as building a new butter plant at Market Drayton.  On May 1st Sommer steps into one of the most important dairy roles in Europe having left his role as Head of International Marketing at Lindt Chocolate.

 

GDT auction price crashes back 6.3%    (13th March 2017)

Tuesday’s GDT auction results were very sobering with an average all products drop of 6.3% (to average $3512 tonne) on top of the 3.2% fall only two weeks ago so heading towards a 10% fall in two weeks.

 

Key prices were (all in US$ not NZ$)

 

SMP                 down     15.5% to average $2118 tonne

WMP                down     12.4% to average $2782 tonne

Cheddar            down     4.2% to average $3435 tonne     

 

Traders anticipated a further weakening of prices, particularly for WMP and SMP but the double digit drop came as a shock.  The auction prices were the lowest recorded for over 5 months and for many New Zealand dairy farmers the price for WMP is now at or below their breakeven COP if the auction price is a good barometer.

 

Total tonnage traded was up 9% to 22,328 tonnes, which undoubtedly contributed to the dramatic drop, especially given the fact the quantity on offer at the same auction in previous years has declined.

 

0.74ppl February retail supplement for Muller non-aligned farmers     (13th March 2017)

 

£3.5m investment programme by Medina   (13th March 2017)

The £3.5m investment programme has already commenced at Medina’s Watsons liquid dairy facility in Hampshire, where 96 farmers supply milk to a factory employing 95 staff plus an additional 25 or so new jobs to be created during the coming 6 months as a result of the upgrade.

 

First Milk extend its Nestle supply contract    (13th March 2017)

First Milk has confirmed it has concluded an extension of its exclusive Nestle liquid milk contract.

 

The contract has been in the custody of First Milk for more than 14 years (2003) and not doubt there were numerous resident cuckoos keen to kick First Milk out given half a chance, because they appear to be raiding other nests with feathers flying as Ian writes this piece!

 

Arla confirm the 13th payment @ £9000 per GB farmer member   (7th March 2017)

Arla have confirmed that its 2500 GB members will receive a 13th payment averaging £9000 into their bank accounts this Friday.

 

Unfortunately, the Arla press release referred to the £31 million distribution as a “windfall” and a “cash bonus” which has certainly prompted an instant response from several Arla members.  As one said, “this choice of words (windfall & cash bonus) suggest that this is money for nothing”. 

 

The payment is actually a return on farmers’ investment in the co-op and the straight forward facts appear to be as follows:

 

Average fully paid up Arla member producing 1 million litres has 7.5ppl invested      £75000.00

His average 13th payment paid this Friday                                                 £  7300.00

Return                                                                                                               almost 10%

 

Conclusion – This part of the Arla model works in terms of return on the money invested and a benefit of being a member.  That’s the simplified message and let’s hopes that.

 

We sincerely hope that DEFRA and AHDB ensure last year’s fiasco is not repeated. Last year in early April Ian described the joint effort involving AHDB and DEFRA as irresponsible and misleading when the February average farm gate milk price was published as rocketing up by 2.48ppl.

 

This was achieved because DEFRA allocated the entire £22million 13th payment to Arla members to February’s milk price rather than spreading it over the 12 months as Arla do. It was a move which was lambasted by both Ian and the TFA.

 

0.25ppl milk price increase for Arla directs – from March 1st     (6th March 2017)

This takes producers’ standard liquid litre price to 25ppl (www.milkprices.com)

 

0.2ppl milk price increase for First Milk’s Midlands & East Wales producers – from March 1st     (6th March 2017)

This takes producers’ standard liquid litre price to 26.25ppl (www.milkprices.com)

 

Average January producer price 27.1ppl  – According to AHDB   (6th March 2017)

 

New cheese plant on the cards for North Wales     (6th March 2017)

Ronald Akkerman (AKA The Flying Dutchman) is back on the UK dairy industries radar this time to design, build and operate a 40 million litre a year capacity state of the art cheese factory in North Wales on behalf of a group of around 20 spring grazing farmers who intend to form a co-operative

 

The initial plant is expected to be up and running by spring 2018 (?) with plans to expand towards 100 million litres.

 

The output from the plant will be focussed on domestic consumption rather than exports with all sales through Bradburys  who have an unrivalled 130 years experience in selling cheese.  Further details are anticipated in the near future.

 

Muller to offer futures contracts   (6th March 2017)

A Muller Ingredients Contract is to be launched to suppliers this summer to its 800 or so non-aligned farmers.

 

The contract will give farmers the opportunity to lock into a margin on up to a quarter (25%) of their milk production by fixing their milk price based on the ww.milkprices.com/FC Stone published prices/UK Milk Futures Equivalent (UKMFE). 

 

Volumes available will be limited to the physical quantities Muller can secure back to back contracts with its ingredients customers.  In other words, all Muller’s farmer’s contracts will be backed off with reciprocal contracts with customers.

 

ASDA launches a free range milk/Pasture Promise branded milk    (6th March 2017)

ASDA is the first of the UK’s big retail giants to launch a branded free range milk with the promise that the milk comes from herds which spend at least 180 days and nights grazing.

 

ASDA has launched with an initial 70,000 litres week going into more than 100 ASDA stores priced at £1.50 for 2 litres.

 

RABDF outlines its future focus and industry event    (6th March 2017)

Following the disappointing decision in October last year by Holstein UK when it rejected working with RABDF with a view to holding one national dairy event, RABDF has reviewed and re-grouped and today announced its plans for the future.

 

There will be no Livestock Event at the NEC on September 6th 2017. Instead there will be a smaller annual Dairy Technical Event at Stoneleigh Park in February.

 

There is no disputing that technology is transforming our lives and changing all businesses worldwide, including dairy farming.  The RABDF event will focus on new technology with technology themed seminars and speakers from across the world.  The event will examine the potential of new technologies and how dairy farmers might take advantage, benefit and profit from the latest developments and innovations.  RABDF’s focus is to transfer the latest technological ideas to grass roots dairy farmers with an event in central England.

 

In addition, RABDF will continue its influencing and lobbying role utilising its links to politicians, policy makers and the trade as well as focussing on encouraging youth into the industry.  To this end a youth board will be formed and RABDF’s work with Women in Dairy initiativeand its conference will continue.  There is even a rumbling that the once sold out and popular RABDF Farmer Conference might emerge from the ashes in middle England, where there is currently nothing similar available in England or Wales.

 

Medina declares improved financials for year ending 30th April 2016    (6th March 2017)

Revenue £160.9m (£156.8m 2015)

Profit £1.15m (£890,000 loss in 2015)

In addition, Medina will be utilising around 50% of its 100 million litre toll processing facility with Muller once its additional litreage to Iceland starts at the end of this month.

 

This world isn’t big enough for the both of us – there’s only milk that’s going to win!    (6th March 2017)

The Australian dairy industry has declared war on non-dairy alternatives to milk such as soy, almond, coconut and rice stating they should not be called milk because they do not have anything close to the nutritional health protein or vitamin benefits of animal milks.

 

They claim its mis-labelling and that these alternatives should be labelled and branded to ensure consumers know exactly what they are putting in their shopping baskets or what’s going into their “almond plant liquid lattes”.

 

It’s time there was a crack down.  Come to think of it what’s all the nonsense about vegetarian sausages, vegetarian burgers and vegetarian rashers of bacon!

 

Studies show soy milk can destroy your thyroid     (6th March 2017)

Soy milk is recognised as coming almost exclusively from GMO which are high in pesticides and an alarming list of properties leading to claims that you simply should STOP consuming it.

 

In a recent study it’s claimed “soy milk causes severe health problems, including colon cancer, ulceration, gastrointestinal inflammation etc.”

 

WANTED BY A MATE – All must be in good condition and ready to go to work       (6th March 2017)

1.    Land Rover Defender 110 2.5 TD5 pickup with or without a back or canopy cover

 

2.    Tractor 110 to 120hp with or without a loader on.  Happy to buy a loader separate

 

3.    Good loader for above tractor

 

Email details to ianpotter@ipaquotas.co.uk

 

0.38ppl milk price increase for Arla members – from 1st March     (24th February 2017)

This takes producers standard liquid litre milk price to 27.45ppl and their standard manufacturing/cheese litre milk price to 28.55ppl.  The standard liquid litre price for Arla Tesco farmers is 28.87ppl with the Arla organic standard liquid litre holding at 41.1ppl.  (www.milkprices.com)

 

No joy in GDT auction results    (24th February 2017)

The average all price index at Tuesday’s GDT auction recorded a 3.2% drop compared to the result achieved only two weeks earlier.

 

Notable movers were:

 

Cheddar            down     5.3% to average US$3590 tonne

SMP                 down     3.8% to average US$2574 tonne

WMP                down     3.7% to average US$3189 tonne

  

Muller unveils its single supplier milk contract  (24th February 2017)

Around 1900 Muller will soon receive the final version 2 of the processors supply contract and it’s clear that Muller have taken on board producer feedback from last November’s farmer meetings and revised the offering.

 

There is no doubt one single contract for all its suppliers is the way forward and whilst the new offering will see some farmers win and some lose it is claimed the overall package is cost neutral to the business.

 

The forecast accuracy tolerance has been increased from 5% to 7.5% prior to any penalty.  That relaxation should be welcome news; however, Muller’s intention is for the few farmers who fall outside of the 7.5% threshold to have one to one support from Muller’s Agriculture team to help ensure all 1900 farmers are under the penalty threshold.  Surprise milk volumes are certainly not an issue confirmed to Muller.

 

The butterfat penalty has been reduced from 0.035ppl in version 1 of the contract to 0.025ppl for every 0.01% less than 4% and identical payment of 0.025ppl for every 0.01% above 4%.

 

The contract notice period is only 3 months following a price change or contract variation compared to the old Dairy Crest 12 month notice period.

 

If a farmer wants to expand by more than 10% he simply needs to have prior (that means prior to spending any £) early engagement with Muller so both parties know when the extra milk will materialise.

 

Milk payments into the bank will be around the 18th of each month and this is a midway point between the current Muller and ex-Dairy Crest payment dates.

 

Finally, individual farmers can utilise the online modelling software to check how the contract affects their individual production.

 

The new contract starts on May 1st with the target sign up date of April 21st.

 

Overall Ian has failed to find any trip wires or traps and the likelihood is most producers will sign the new contract if they feel it is fair and they want to join Muller on its ambitious UK journey and are inspired by Muller’s vision.  If any Muller farmers believe Ian has overlooked any key points please email him.

 

Arla hunting for milk but Arla’s CEO claims rising milk supply keeps prices in check    (24th February 2017)

Arla has written to its UK members stating it requires more milk, initially from existing members.  The letter has produced a very mixed response from Arla members who have contacted Ian today.  In summary, most state they have not even started on the road to recovery following almost 2 years of low milk prices at below COP and have minimal appetite to ramp up production in case prices ease again. 

 

Its certainly a confusing message from Arla with its CEO Pedar Tuborgh stating

 

"Milk prices are currently at a level that is sustainable for the whole business, including our farmers," he said.

 

And according to one report he has also stated

 

“a rising supply of milk on world markets is likely to rein in further gains in prices that have increased nearly 50 percent since a slump last year.”

 

Its certainly a mixed and confusing message from Arla HQ and Arla UK which members are trying to sieve through.

 

That’s an individual decision but from Arla’s point of view if they do require extra milk existing members must be offered the chance to fill the gap.  Failing that Arla will presumably move to Stage 2 and open the door to new recruits to see what the appetite is.

 

Arla UK sales and revenue down    (24th February 2017)

Arla’s largest market, the UK, has seen its 2016 calendar year results weigh in with a 12% drop in revenue to £1.86billion (€2.2billion) down from the 2015 numbers of £2.2billion (€2.5billion).

 

Within the numbers Arla’s UK branded products saw sales volumes rise by an encouraging 7.6% with branded liquid milk growing by 12%.

 

Morrison’s Milk for Farmers accounted for 15% of sales within its competitors on the shelf and Arla’s yoghurt sales were up 116% more than double but from a standing start in 2015.

 

Arla Foods as a European co-op saw net profit grow by a healthy 20.7% to €356m.

 

 

NFU launches a new contract checking facility     (24th February 2017)

The NFU, in conjunction with its panel of legal firms, has launched a contract checking service for members in the hope they use the facility prior to signing a new contract.

 

The service comes in three stages:

 

·         A free initial discussion with the NFU’s CallFirst Specialist Advisers’ team, available to all NFU farmer members

·         An initial report produced by an NFU legal panel solicitor considering members’ requirements, reviewing the contract and explaining what it means

·         A more detailed review with advice on how to renegotiate the contract terms.

 

The service covers areas such as milk contracts, grazing licences and tenancy agreements.  It’s an opportunity for NFU members to seek professional help and guidance prior to signing on the dotted line.  It’s not free but the first 50 LAS subscribers who take up the offer will be given a £100 voucher towards the fee.

 

At this week’s Dairy Breakout Session during question time Ian suggested that given the fact 1900 Muller farmers are about to receive a contract to sign and that the NFU Dairy Board Chairman had commented that it seemed to be a reasonable and fair contract and agreed that it demonstrated that Muller had listened to its Producers, would the NFU  consider putting out a press release specific to this contract rather than having dozens or possibly 100’s of farmers individually contacting them for an opinion.  The idea is understood to be under consideration and the NFU are expected to give some help to the Muller farmers with their general view of the new contract.

 

NFU Conference     (24th February 2017)

Brexit dominated this week’s NFU Conference and whilst those negotiating on behalf of UK agriculture will battle for our industry to receive the same level of support post Brexit as we receive today, most are bracing themselves for a haircut and a sea change in who receives help and how it’s delivered.

 

The Environment Secretary, Andrea Leadson, was keen to point out that

 

“there will be support for our vital food and farming industry after we leave the EU”

 

but she didn’t confirm what sort of support, how much support or for how long it would last.

 

With 86,000 farmers receiving BPS payments and these payments representing 50% of the average farmers’ income it’s a near certainty that such payments will not continue at this level going forward in the next decade.  The CAP payments were worth £3.5billion to the UK in 2016 and will be very challenging to defend post Brexit.

 

The loss of these payments would trigger significant consolidation at farm level as many farms become unviable and unsustainable.  There were a number of reasons to view the post Brexit dairy industry with enthusiasm and optimism, especially for those who are low cost milk producers wanting to expand because if the BPS payments are cut or even axed more land is sure to become available.  Some were privately licking their lips at the prospect.

 

RABDF future announcement    (24th February 2017)

The RABDF have called a press briefing on Monday 6th March to announce the future of the organisation and presumably the future for its 6th September 2017 Livestock Event.

 

0.98ppl Muller non-aligned retail supplement for January  (20th February 2017)

In addition, the Muller February retail supplement prediction currently stands at 0.82ppl

 

Friesland Campina (FC) guaranteed farm gate milk price increases for February  (20th February 2017)

The FC price is the one most, if not all, milk purchasers monitor.  Its February producer/supplier price increased by 0.5 cents per kg (0.484ppl), which converted to a UK standard liquid litre equates to 28.98ppl.  The average FC producer price for the last 6 months converts to 27.26ppl (www.milkprices.com)

 

Dairy Crest’s 9 months trading statement – to 31st December 2016           (20th February 2017)       

In its latest trading update the additional costs experienced by DC, particularly the increased farm gate price it paid for milk (+38%) has led to the statement that net year end debt for the business is expected to be higher than anticipated by 31st March 2017. 

 

DC’s share value fell 5.77 and is at that value today but was down to 565p this morning.

 

Muller’s new farmer representative structure is in train and the elections are set to be very competitive    (20th February 2017)

Having taken on board feedback from a nationwide series of meetings last November, Muller has launched its new farmer representative structure ahead of confirming any changes to its single contract launch.

 

Democratic representation appears to be what all parties want and to that end these are the nuts and bolts of the structure.

 

A Muller Farmer Forum of 21 supplying farmers will be elected by its 1900 or so farmer members, which will be roughly 1 per 90 farmers.  This is split in proportion to the aligned v non-aligned farmers as follows:

 

9 non-aligned farmer forum representatives

11 aligned farmer forum representatives

1 organic farmer forum representative

21

 

The positions will be for a 3-year period by rotation.  The forum will have complete responsibility for deciding the future representative structure with nothing ruled out and they could even consider setting up a DPO.  Basically the 21 farmer members start with a clean sheet of paper.

 

On the subject of annual subscription to fund development, training and independent advice it will be up to the newly elected 21 forum representatives to decide on what level this should be set at, if any, although it’s clear if independent advice is required it needs to be funded.  Muller has confirmed that initial start up funding will be provided by Muller until additional funds flow into the forums bank account.

 

Once in place this forum will elect a board of 7 MMG Board representatives to work closely with the Muller management.

 

For obvious reasons of continuity an interim board of 7 will be put in place and it will take 3 years before the forum can say all board members were put in place by the forum.  However 3 of the existing MMG Board members will immediately by rotation stand down in June of this year followed by 2 in 2018 and 2 in 2019.

 

The eventual outcome should be much better communication from grass roots farmers to senior management.

 

It’s time for Muller farmers to put up (or shut up) and those interested in standing need to throw their names in to the hat by March 3rd for a nomination form to be returned by 13th March and by early April the forum members should be in place.  Whilst Muller is tight lipped over the number of nominations they have already received they have confirmed that there will be elections in several regions, which is a healthy prospect and bodes well for the future.

 

Code of Conduct with advance notice of interest rate changes needed for Bankers (spelt with a B)    (20TH February 2017)      

The UK dairy industry has committed a lot of effort and energy into ensuring all milk purchasers abide by a Voluntary Code and give advance notice of price movements and move away from discretionary milk pricing.

 

The same does not appear to apply to our bankers following the recent decision by Investec Bank to retrospectively cut its deposit interest rates.  In fact, in their terms and conditions it states “Interest rates may, at our discretion, change.”

 

And we all thought the banking world has cleaned its act up.

 

.5ppl milk increase for Arla directs – from 1st February    (3rd February 2017)

This takes producers standard litre price to 24.75ppl.  These producers appear to be the poor relations but at the end of the day they were never likely to be anything other having taken the decision to remain outside of the co-op’s membership.

 

1ppl milk price increase for Pattemores suppliers – from 1st February  (3rd February 2017)

This takes producers standard liquid litre price to 27.5ppl. (www.milkprices.com)

 

1ppl milk price increase for Pensworth suppliers – from 1st March  (3rd February 2017)

This takes producers liquid standard liquid litres price to 27.25ppl. (www.milkprices.com)

 

0.85ppl to 0.95ppl A milk price increase for First Milk Members – from 1st February  (3rd February 2017)

Details as follow:

            Midlands & East Wales Pools + 0.95ppl   26.05ppl liquid standard litre

            Haverfordwest                      + 0.90ppl   28.23ppl liquid standard litre & 29.16ppl manufacturing  

            Lake District                         + 0.90ppl   27.11ppl liquid standard litre   & 28.04 ppl manufacturing

            Scottish Mainland                 + 0.85ppl   26.09ppl liquid standard litres

 

The figures in brackets are the www.milkprices.com standard liquid and manufacturing litre prices.  Note the Haverfordwest standard litre price includes the estimated 1ppl Tesco group cheese payment.

 

Stand on milk prices for March 1st (3rd February 2017)

            Muller                           (26.69ppl)

            Crediton Dairy    (28.5ppl)

 

With volumes increasing almost daily, cream prices back almost 25% in just over a month, the weakening of butter prices and SMP prices combining all of these with a half decent Spring its likely March 1st increases will be the last for a while. Most farmers will be praying the surge in production is curtailed because the way these markets are heading the next price move could easily be South. Current spot prices for milk are around 26ppl and hovering and if any producer is not already on 30ppl it’s a near certainty they won’t be for many months to come.

 

Milk production is still down   (3rd February 2017)

Whilst daily milk production is estimated to be down 3.8% compared with 12 months ago at around 32 million litres a day (source AHDB) milk is now starting to flow and impact on forecast deliveries and on European commodity buyers appetite to purchase.

 

Welcome pay-out for First Milk members  (3rd February 2017)

After a difficult and challenging two years First Milk has announced that its monthly milk payments to members will revert to “normal terms” meaning members receive 6 weeks milk money during February.

 

The delayed payments for January deliveries for which part would have been part paid in February and part in March will now all be paid in full in February.  Sorting the payments has cost First Milk £6 million in total.

 

The deferred payment started in January 2015 when First Milk had to use farmer’s money to manage cash flow and paid 50% on the 24th of the month following supply and 50% on the 10th of the month after.

 

It’s another encouraging sign as to how the Co-ops fortunes have improved and CEO Mike Gallacher has commented that this “draws a clear line under the turnaround process for First Milk”. Job done – not really but its now down to the mundane day to day stuff.

 

Arla to invest £37.5 in the UK (3rd February 2017)

Arla is to invest a further £37.5 million (€44 million) in its 13 UK sites/logistics in 2017 representing a 50% increase compared to its 2016 commitment.  The figure is part of a £285 million global Arla investment.

 

The goal for Arla is to “move more milk from bulk into brands and improve the profitability of the farmer owners”

 

1.25ppl milk price increase for Grahams Dairies (Scotland) suppliers – from February 1st      (27th January 2017)

This takes producers’ standard liquid litre price to 26.75ppl (www.milkprices.com)

 

1.1ppl milk price increase for Freshways suppliers – from February 1st      (27th January 2017)

This takes producers’ standard liquid litre price to 27.5ppl (www.milkprices.com)    

 

0.76ppl (1 Euro Cent) milk price increase for Arla members – from February 1st     (27th January 2017)

This takes producers standard liquid litre price to 27.07ppl (non-aligned) and 28.49ppl (Tesco aligned).  The standard manufacturing litre price will move up to 28.11ppl (www.milkprices.com)

 

Lack of SMP sales from intervention stores is concerning     (27th January 2017)

Everyone admires a strong seller, especially when it’s someone like the European Commission.  However, their recent third tender involving 7,500 tonnes once again resulted in no sales of intervention SMP and it looks as if they could have completely mis-read the market.

 

During three tenders the Commission have only succeeded in selling 40 tonnes out of a total public stock of more than 351,000 tonnes.

 

Ian has been informed that there is a shelf life for the SMP and that significant quantities will have to be sold shortly and if that combines with a levelling off in SMP prices, or even a dip, the Commission could quickly turn from being a strong seller to an emergency seller, which will result in most ex-farm gate milk prices catching a chill, including those in the UK.

 

Not to mention that its not impossible that there could be calls for further intervention this spring if the market suddenly dives.

 

Dairy markets have passed 12 o’clock with spot prices down to 26 to 27ppl     (27th January 2017)

Following a period of rapid upward movement in dairy trading prices, spot milk prices and futures contract prices its clear commodity prices are at best levelling off and potentially about to head south.  Spot milk, which is only a barometer with relatively small quantities traded is down from 40/41p to 26/27ppl.

 

Dairy commodity prices have eased as on farm deliveries show signs of increasing not to mention the firming of currency and the fact cream is struggling to find homes.

 

Freshways have confirmed a rumour that one or more of its producers under notice to leave them on February 1st has, at the 11th hour, contacted Freshways in a bid to rescind his (their) notice within days of ceasing to supply the firm.

 

It will be very interesting to follow whether farm gate milk prices continue to increase in coming months.  Several milk purchasers gave reasons why there was a lag in prices moving up so will the same lag apply to prices levelling off or coming down?  A levelling off and period of stability for all involved will be no bad thing at this stage, especially if that stability comes with a farm gate milk price around 28 to 30ppl.  The biggest fear is that we get an early spring with oceans of milk, which will exert serious pressure on farm gate milk prices.  Where this market will end up is anyone’s guess but on today’s evidence it’s easily passed 12 o’clock and looking like it could be about to head south.  You have been warned.

 

Changes at Muller     (27th January 2017)

Lyndsay Chapman has stood down from her roll as Agriculture Director of Muller by mutual agreement.  Lyndsay joined Muller from Dairy Crest a year ago when Muller acquired Dairy Crest’s liquid division.

 

Rob Hutchinson has taken over the position with immediate effect.

 

1.5ppl milk price increase for suppliers to Paynes Dairies – from 1st February     (20th January 2017)

 

1ppl milk price increase for suppliers to Meadow Foods – from 1st February      (20th January 2017)

This takes producers’ liquid standard litre price to 27.55ppl (www.milkprices.com)

 

New MD at Medina    (20th January 2017)

After one year out of the UK dairy industry’s front line Mike Sheldon, former MD of Dairy Crest Dairies is back, this time as MD of Medina Dairy.

 

Sheldon was a casualty of the Muller acquisition of Dairy Crest’s liquid business and the move to Medina looks a perfect fit for both parties.  His 22 years of experience with Dairy Crest is likely to bring new ideas to the Medina board meetings.  He was instrumental in Dairy Crest’s adoption of a DPO and the Dairy Crest formula contract both of which have been axed by Muller.

 

Meadow results are impressive   (20th January 2017)

Meadow Foods Limited have published their annual report and financial statements for the year ended 31st Mach 2016 and the financials are impressive in a year when the majority of Meadow’s 550 supplying farmers and most non-aligned producers were unable to cover cost of production having to eat into any available cash reserves.

 

Given the worldwide collapse in dairy product values there is no surprise in the fact that Meadow’s turnover was down 40% from £376million to £228million, however, profit before tax was only down 15% from £14.2million to £12million (£22,000 per Meadow supplier).

 

However, Meadow’s profit margin increased from 3.8% to 5% which is some achievement to maintain your margin in a collapsing market.

 

The dividend pay-out to shareholders of £3million means MD Simon Chantler for the second consecutive year or more appears to be the best paid person in the UK dairy industry with a total pay-out for the year of £2.3million slightly down on the previous years packet by £20,000.  No one could confuse him with the nursery rhyme character “Simple Simon”.

 

These results no doubt encouraged Paine & Partners to make their significant investment in Meadow in September 2016.

 

Details will come out in future published accounts; however, based on these numbers one knowledgeable bean counter is speculating the total value of the Meadow business at the time of the Paine & Partners deal could have been in the region of £100million.

 

  Simple cost effective farm accounts package wanted    (20th January 2017)

An unusual request, however, if any readers have a fairly simple farm accounts package, which is good value for money, could you please email us with the name and version.  Thanks, Ian

 

2ppl milk price increase for suppliers to Helers Cheese – from February 1st     (13th January 2017)

This takes producers’ manufacturing standard litre to 27.33ppl    

 

1ppl milk price increase for suppliers to Belton Cheese – from February 1st     (13th January 2017)

This takes producers’ manufacturing standard litre price to 28ppl and their liquid standard litre price to 27.25ppl (www.milkprices.com)

 

1.6ppl milk price increase for suppliers to Wensleydale Creamery – from 1st January (PRODUCER NOTIFIED)    (13th January 2017)

 

Iceland, Medina, Buckleys and FFA     (13th January 2017)

There were a couple of inaccuracies in last week’s story connected to the decision by Iceland to switch litreage from Arla to Medina from 1st April 2017

 

The actual literage involved is 35 million into Iceland, London and not the 100 million litres Ian was told from two sources. This means from April 1st Medina’s total literage contracted to Iceland increases to 60 million.

 

Secondly, Medina, along with several other milk purchasers who use basket pricing, have seen  their suppliers find it extremely difficult to cope with the one month time lag before farm gate prices have moved up.  Consequently Medina injected more money into supplying farmers’ pockets, including Buckleys farmers.  Note, the same time lag benefitted farmers when prices dropped much slower.  Medina have confirmed that like others they are reviewing their basket pricing.

 

The basket price for December deliveries to Buckleys was 21.42ppl to which Medina added a further 1ppl support to give 22.42ppl.

 

For January it will be 23.48ppl plus 1ppl to total 24.48 with the February basket already at 25.77pp and hopefully rising.

 

 

In a nut shell the claim made to Ian that Buckleys paid 20ppl or less for December deliveries and by default one of the lowest farm gate milk prices in the UK was inaccurate. In addition none of the Milk for the enlarged contract will come from Buckleys Suppliers and will come Medinas Southern sources.

 

We apologise for this inaccuracy and hope this clarifies the position and correct numbers.

 

Note, this clarification and apology does not impact on David Handley’s planned meeting with Iceland

 

Iceland, Medina, Buckleys and FFA   (11th January 2017)

There were a couple of inaccuracies in last week’s story connected to the decision by Iceland to switch litreage from Arla to Medina from 1st April 2017

 

The actual litreage involved is 35 million into Iceland, London and not the 100 million litres Ian was told from two sources. This means from April 1st Medina’s total litreage contracted to Iceland increases to 60 million.

 

Secondly, Medina, along with several other milk purchasers who use basket pricing, have seen  their suppliers find it extremely difficult to cope with the one month time lag before farm gate prices have moved up.  Consequently Medina injected more money into supplying farmers’ pockets, including Buckleys farmers.  Note, the same time lag benefitted farmers when prices dropped much slower.  Medina have confirmed that like others they are reviewing their basket pricing.

 

The basket price for December deliveries to Buckleys was 21.42ppl to which Medina added a further 1ppl support to give 22.42ppl.

 

For January it will be 23.48ppl plus 1ppl to total 24.48 with the February basket already at 25.77pp and hopefully rising.

 

 

In a nut shell the claim made to Ian that Buckleys paid 20ppl or less for December deliveries and by default one of the lowest farm gate milk prices in the UK was inaccurate. In addition none of the Milk for the enlarged contract will come from Buckleys Suppliers and will come Medinas Southern sources.

 

We apologise for this inaccuracy and hope this clarifies the position and correct numbers.

 

Note, this clarification and apology does not impact on David Handley’s planned meeting with Iceland.

 

2ppl milk price increase for First Milk members – from 1st January   (6th January 2017)

 

This takes producer’s liquid standard litre price to:-

1.     27.33ppl Haverfordwest Creamery (including the Tesco Cheese supplement) and 28.25ppl on a manufacturing standard litre.

2.     26.21ppl Lake District Creamery and 27.13ppl on a manufacturing standard litre

3.     25.24ppl for Mainland Scotland

4.     25.10 Midlands and East Wales

 

1.5ppl milk price increase for Crediton Dairy suppliers – from 1st February   (6th January 2017)

 

This takes producers liquid standard litre price to 28.5ppl for a non aligned contract and extremely close to that paid by Tesco/TSDG

 

1.5ppl milk price increase for Pattemores – from 1st January

This takes producer’s liquid standard litre price to 26.5ppl (www.milkprices.com)   (6th January 2017)

 

 

1.5ppl milk price increase for Yew Tree Dairies liquid contracted suppliers – from 1st February  (6th January 2017)

 

This takes producer’s’ liquid standard litre price to 27.5ppl (www.milkprices.com)

 

In addition, Yew Tree Dairies December B price has been confirmed at 27.32ppl.

 

1.5ppl milk price increase for Arla Directs – from 1st January   (6th January 2017)

 

This takes producers liquid standard litre price to 23.25ppl www.milkprices.com

 

1.25ppl milk price increase for Muller non-aligned suppliers from 1st February  (6th January 2017)

 

This takes producer’s standard liquid litre price to 26.69ppl (www.milkprices.com) excluding an estimated 0.82ppl February retail supplement.

 

1.25ppl milk price increase for Pensworth suppliers – from 1st February  (6th January 2017)

 

This takes producers liquid standard litre price to 26.25ppl – www.milkprices.com with the indication that the company anticipates a similar increase a month later if anticipated and current trading conditions continue.

 

1ppl milk price increase for Glanbia Cheese suppliers – from 1st February  (6th January 2017)

 

This takes producer’s manufacturing standard litres to 28ppl www.milkprices.com

 

1.65ppl milk price increase for Wyke Farms producers – from 1st January (PRODUCER NOTIFIED)    (6th January 2017)

 

 

GDT auction prices soften by 3.99% but…..      (6th January 2017)

 

This week’s GDT auction results saw prices ease by 3.99% to average$3463, with the fall triggered by a significant fall in WMP prices.

 

Key movers were:

 

WMP                down 7.7% to average $3294 tonne

Butter               up 0.5% to average $4308 tonne

Cheddar            up 1.4% to average $3894 tonne

SMP                 up 2.3%to average $2660 tonne

 

Despite the fall many bean counters and economists continue to firmly back a positive outlook for 2017 and remain upbeat.

 

Oxford Farming Conference accused of snubbing British potato growers   (6th January 2017)

 

Whilst Ian did not attend this weeks conference the key point relayed to him from the day’s events related to the lunch menu and nothing from the coach load of ministers, MPs, SNPs and industry bigwigs’ who took the stage.

 

Instead of offering delegates a lunch with a humble British baked potato (or similar) the Conference caterers were alarmingly permitted to offer couscous, which has its origins in Israel with pasta shaped rice grains you simply add water to.

 

The offering might be healthy but if the caterers had wanted something you add water to they should have put out a real British potato product and offered the delegates and earth people Smash – “For Mash Get Smash”

 

The aliens and earth people catering at The Oxford Real Farming Conference were left smirking at this gaffe knowing they served British potatoes to British farming delegates at their Conference.  Come on Oxford you could have done better.

 

1.51ppl milk price increase for Arla members – from January 1st   (22nd December 2016)

This takes producers standard liquid litre price to 26.31ppl

 

1.5ppl milk price increase for suppliers to Paynes Dairies - from 1st January   (22nd December 2016)

 

Only 40 tonnes (0.18%) out of 22,150 tonnes of SMP sells    (22nd December 2016)

A pitiful 40 tonnes of Intervention SMP have been sold of which 20 tonnes were sold in the UK at a minimum EU price of €2151 tonne (£1810) or more. A second tender period is now open.

 

0.75ppl milk price increase for Arla Organic suppliers – from January 1st    (22nd December 2016)

This takes producers standard liquid litre price to 41.1ppl

 

Pattemores correction   (22nd December 2016)

Our late reporting of the 1ppl milk price increase for suppliers to Pattemores was actually on top of an additional 0.75ppl increase so the total 1st December increase amounts to 1.75ppl. Apologies for this missive and many thanks to one of our regular readers for spotting the error.

 

Christmas Dairy Pantomime Fun    (22nd December 2016)

A very talented and well briefed 12 year old has produced a series of GB dairy industry pantomime cards, which should bring a smile to many of you and perhaps even to most of the characters featured.

 

To view the range click on:    www.dairypantomimes.yolasite.com

 

 

1.5ppl milk price increase for suppliers to Paynes Dairies - from 1st January      (19th December 2016)

 

Pattemores correction    (19th December 2016)

Our late reporting of the 1ppl milk price increase for suppliers to Pattemores was on top of an additional 0.75ppl increase so the total 1st December increase amounts to 1.75ppl. Apologies for this missive and many thanks to one of our regular readers for spotting the error.

 

2ppl forecast milk price increase for First Milk members – from January 1st       (16th December 2016)

No longer are First Milk waiting for the likes of Arla to declare before they announce price increases.  At the moment it’s only a forecast but the likelihood will be for it to be confirmed before the New Year.

 

1ppl milk price increase for supplies to Pattemores – from 1st December  (16th December 2016)

This takes producers’ standard litre to 25ppl. 

 

We were notified of this increase on the 30th November and apologise for missing it from previous bulletins.

 

First Milk’s half year results are encouraging    (16th December 2016)

In the space of 20 months under the captaincy of Mike Gallacher, First Milk has seen a dramatic turn around in its fortunes having moved from a position of how many weeks will it continue before it’s the next DFOB, Westbury or Amelca to ranking its member milk prices alongside and indeed in some instances ahead of its main competitors e.g. Arla and Muller.

 

Its six month trading results to 30th September released this week include the following:

 

Operating profits up to £9.2 million (compared to £1.2m 2015)

Profits before tax were up to £6.8 million (compared to a loss of £2.4m in 2015)

Bank debt had fallen to £26.1 million (vs. £46.1m in the prior year)

 

Once appointed, Gallacher immediately got his surgical instruments out and sold First Milk’s loss making side lines and subsidiaries including Glenfield Dairy, CNP Professional and its stake in Westbury Dairies to focus on making quality cheese.  That’s what First Milk’s future depends on because the big hit items have been dealt with and it’s down to the day to day work in which any cheesemaker with a batch of down graded cheese costs serious money.  Having said that, in times of shortages, like today, rejects in the cheese world will be scarcer.  According to First Milk and others, the quality of cheese First Milk are producing is consistently high and long may this continue.

 

According to First Milk in the period since Gallacher took the reins to cut out the dead wood and loss making areas his programme has delivered £33m improvement in business performance including a £2.3m reduction in its wage bill.

 

RPA claim 68% (£822 million) of SFO already paid   (16th December 2016)

According to the RPA in the first 10 banking days of December it paid 59,000 English farmers a total of £822 million with the aim of paying 90% of eligible claims (this word eligible leaves some wriggle room) by 30th December.

 

Direct Milk DPO (Muller) formula contracts end at 31ppl plus    (16th December 2016)

Having operated since April 2013 the Direct Milk DPO formula contracts adopted by some Muller non-aligned come to an end on January 31st at between 31.378ppl and 31.188ppl following a January 1st 1.298ppl increase.

 

Following a decision by  Muller to serve  12 months notice on producers to end the formula options as soon as they acquired the Dairy Crest liquid business almost a year ago.

 

Over the period of almost four years the formula has paid producers on average 29.03ppl based on a liquid standard litre which represents an uplift of 2.5ppl over the equivalent non-aligned average price of 26.55ppl.

 

More importantly the January formula price is within only 0.3 to 0.2ppl of the current AMPE price of 31.5ppl.

 

It’s a blow to non-aligned who signed up to it because it was an option they had rather than having to rely on discretionary pricing?  New ideas, opportunities  and alternatives for Muller non-aligned are sure to emerge in 2017.

 

From 1st February those on the contracts will revert to the Muller standard litre price of 25.44 (January price) plus any retail supplement.

 

GDT auction prices up 3.5% with WMP up 4.9%  (9th December 2016)

Tuesday’s GDT auction results produced more positive moves.  Key movers were:

 

All products average up 3.5%

 

WMP                +4.9% to average US$3593/tonne

Cheddar            +2.2% to average US$3752/tonne

Butter               +1.7% to average US$4262/tonne

SMP                 +1.4% to average US$2570/tonne

 

2.15ppl milk price increase for suppliers to Meadow Foods – from 1st January    (9th December 2016)

This takes producers’ standard litre price to 26.55ppl.

 

2ppl milk price increase for suppliers to Grahams Dairies – from 1st January    (9th December 2016)

This takes producer’s standard liquid litre to 25.5ppl on all litres delivered having abandoned the A&B pricing (see below).  In addition Graham’s supplier receive a retailer supplement.

 

 

2ppl milk price increase for suppliers to Belton Cheese – from 1st January    (9th December 2016)

This results in a standard manufacturing litre milk price of 27ppl and standard liquid litre 26.25ppl (www.milkprices.com)

 

1ppl milk price increase for suppliers to Joseph Heler Cheese – from 1st January               (9th December 2016)

 

Spot milk prices soften    (9th December 2016)

The 41ppl spot price has now softened to 37 to 38p and in some cases a shade lower as we approach the Christmas period.

 

Grahams Dairies abandon A&B pricing and return to pool pricing    (9th December 2016)

Having operated A&B pricing since February 2015 following recent consultation with its farmer suppliers Grahams have abandoned A&B pricing from December 1st in favour of a return to the traditional pool pricing.

 

Nick Holt Martyn sums up the situation in two sentences    (9th December 2016)

In The Dairy Group’s latest release headed “Farmgate Price Is Lagging Too Far Behind the Market” – Nick Holt Martyn wrote the following, which requires no further comment:

 

“On a monthly basis the gap between markets and the farmgate is as wide as at any time.  With markets getting to 32ppl a recovery to 28ppl is now overdue ……….  Failure to pass on market returns is doing serious damage to farmers businesses and will set back farmer/processor relationships.”

 

AHDB Dairy apologise for their major mess up   (9th December 2016)

Following widespread publicity and criticism AHDB Dairy have issued an apology following their unjustified criticism of Morrisons Milk For Farmers:

“Milk for Farmers

Published 2 December 16

Recent AHDB analysis on Morrisons’ Milk for Farmers range, which was used in an article in The Grocer, may have given the impression that AHDB was critical of efforts by Morrisons and Arla to improve returns to dairy farmers.

AHDB would like to apologise if this was the case, and would like to state it welcomes any retailer initiative that benefits farmers and aids consumer choice. AHDB’s usual internal checks and balances were not followed on this analysis due to an internal error.  This in no way reflects on the journalistic standards of the Grocer and we apologise for any misunderstanding.”

Whether the matter is closed and filed depends on the outcome of further meetings involving Morrisons, Arla and the Arla AMBA Board all of whom intend to hold AHDB to account and it will be a miracle if the above apology is the end of the matter.

 

More cheap milk   (9th December 2016)

Around 60 plus Bestway Cash & Carry outlets have Country Life Milk supplied by Muller on offer at 79p for 2 litres in semi-skimmed and whole.

 

Cows and Catastrophes – The Flights and Fancies of a Cornish Dairy Farmer by Brindley Hosken   (9th December 2016)

It’s the story of one dairy farmer’s 35 years of milking cows but it certainly doesn’t feature my old friends, Doom & Gloom, and does have some witty farmer humour and is well worth reading.

 

In 2010 Brindley took the heart breaking decision to sell his herd and in the book he talks through the family emotions of that decision as well was the effects of TB.  When asked, would he start dairy farming again?  “I’d rather stick pins in my eyes.”

 

It’s a worthy stocking filler and the print is fairly large, £9.95 from Old Pond Publishing.

 

http://www.oldpond.com/cows-and-catastrophes.html

 

British Cheesemakers turn up trumps with Chelsea Pensioners   (9th December 2016)

The Annual Ceremony of the Christmas Cheeses at the Royal Chelsea Hospital for Ian signals the start of Christmas celebrations.  It’s a very special event the Dairy Council has been involved with for more than 50 years and its roots date back to 1692.

 

Full marks to all our UK cheesemakers who provided a record 250kg of cheese for this Wednesday’s event.

 

Also full marks to The Dairy Council for involving the Military Wives Choir, and babies, to ring in the start of the festive season for the pensioners.

 

4ppl milk price increase for suppliers to Dairy Crest Davidstow   (2nd December 2016)

The 4ppl is split as follows:

 

2ppl on January 1st

2ppl on February 1st

 

The increases result in the following standard litre prices: (www.milkprices.com)

 

1st January         liquid standard litre price 26.92ppl and on the manufacturing standard litre price 28ppl

1st February       liquid standard litre price 28.92ppl and on the manufacturing standard litre price 30ppl

 

2.5ppl milk price increase for Muller non-aligned - from 1st January    (2nd December 2016)

This takes producers’ liquid standard litre price to 25.44ppl, excluding the retail supplement, which is expected to reduce to 1.1ppl.  (www.milkprices.com)

 

Another 2.5ppl milk price increase for suppliers to South Caernarfon Creameries - from 1st January    (2nd December 2016)

This takes producers’ manufacturing standard litre price to 28.03ppl (www.milkprices.com)

 

2.5 & 2ppl milk price increase for First Milk members - from December 1st    (2nd December 2016)

The increases are as follows:

2.5ppl increase for First Milk’s Midlands & East Wales contracted producers from 1st December

2ppl increase for First Milk’s other pools from 1st December

 

The increases result in the following standard litre prices:

Haverfordwest                25.17ppl (including the Tesco Cheese Group payment of 0.84ppl)

Lake District/Aspatria     24.21ppl

Scottish Mainland          23.24ppl

Midlands & East Wales 23.10ppl

 

All B litres will be paid at 25ppl for December.

 

1.71ppl milk price increase for suppliers to Glanbia cheese - from 1st January   (2nd December 2016)

This takes producers’ standard manufacturing litre price to 27ppl and the liquid standard litre price to 26.11ppl  (www.milkprices.com)

 

1.5ppl milk price increase for liquid contracted suppliers to Yew Tree Dairies - from 1st January    (2nd December 2016)

This takes producers liquid standard litre price to 26ppl (www.milkprices.com)

 

1ppl milk price increase for Arla Direct – from 1st December    (2nd December 2016)

This takes producers’ liquid standard litre price to 21.75ppl

 

Mirror Mirror on the Wall, who is the fairest of them all?    (2nd December 2016)

Here is a snap shot of several key liquid standard litre prices as gathered together by us at the 1st December.  Note, that’s money in the bank in mid January!

 

Barbers                                                 26.7ppl

First Milk Haverfordwest                          25.17ppl for 90% of the milk with additional B litres paid at 25ppl

(including the Tesco Cheese Group payment of 0.84ppl)

Freshways                                            25.05ppl

Lactalis/The Fresh Milk Company            25.0ppl

Dairy Crest Davidstow                            24.92ppl

Paynes                                                 24.8ppl

Arla members                                        24.63ppl

Yew Tree Dairies Liquid              24.5ppl

Glanbia                                                 24.46ppl

Meadow Foods                                      24.4ppl

First Milk Lake District/Aspatria              24.21ppl for 90% of the milk with additional B litres paid at 25ppl  

Grahams Dairies                                    23.5ppl excluding the retailer supplement

First Milk Scottish Mainland                    23.24ppl for 90% of the milk with additional B litres paid at 25ppl  

First Milk Midlands & East Wales           23.10ppl for 90% of the milk with additional B litres paid at 25ppl  

Muller                                                   22.94ppl excluding the retailer supplement (see above)

Arla Direct                                             21.75ppl

 

Muller pause for thought on new contract and representation    (2nd December 2016)

Muller have now completed their first 2016 nationwide series of meetings and have received some thought provoking feedback on its proposed new milk contract and farmer representation particularly from its non aligned farmers.

 

The turnout has been around 1,000 of the 1900 farmers supplying the Company and some of the views have been described by Muller as strong and for sure Muller are now more in touch with the views of their suppliers.  Consequently they have taken note and have decided to delay introducing the new contract until into the New Year with the expectation that farmers will sign from February onwards. Some non aligned clearly wanted Muller to pull back but at least a pause and reflect means changes might be factored into the final version.

 

There are still numerous important questions to be answered and addressed both with the proposed new contract detail and the new representation structure which will hopefully become clearer during this month.

 

Undoubtedly one of the issues Muller has faced has been the timing of the two changes given the fact the non aligned Muller farmers are rather frustrated and aggrieved at the slow pace of upward movement in their milk price which for December is a standard litre price of under 23ppl (22.94ppl) excluding retail winter supplement payment estimated to be 1.4ppl.

 

Muller is the official milk of the British Athletics Team  (2nd December 2016)

In addition to its role as an official supporter of the British Athletics Team it is also the official milk for the team

 

Very cheap milk 2 litres for 75p!    (2nd December 2016)

From Dhamecha Cash & Carry outlets in London and the Midlands with this promotion declared as running until at least the end of January. Milk packaged and suppled by Muller.

 

Improve Rural Broadband by making ISP's more accountable for poor Download Speed   (2nd December 2016)

Rural Broadband speeds in Rural areas  are unacceptable. There is no incentive for Internet Service Providers to improve performance - (they get paid the full monthly fee whatever the download speed) - they are not accountable and need government intervention to improve.

In many rural areas rural business, farms, pubs, shops and private homes endure download speeds of less than >1mbps. In this day and age in our digital world this is disadvantaging rural business and communities. Our children are set school homework on-line and cannot access broadband to research it. Our businesses cannot operate

Click this link to sign the petition which was kick started by Ben Watts of Kite Consultancy:

https://petition.parliament.uk/petitions/173803/sponsors/Rh41NvlGPOLxt7AUScX

1.49ppl (2 Euro Cents) milk price rise for Arla members – from 1st December (25th November 2016)

This takes producers standard litre price to 24.63ppl.

 

The price increase, whilst welcome, will be significantly below what many had hoped for and to that end disappointing to remain one of the lowest in the UK.

 

In an unusual move Arla have declared that they anticipate similar upward price improvement for January 1st.  Such forward projections are unheard of and indicate that negotiators have made their point that prices have to rise and clear signals sent to farmer members.

 

1.49ppl (2 Euro Cents) milk price rise for Arla Organic members - from December 1st     (25th November 2016)

This takes producers’ organic standard litre price to 40.18ppl.  

 

3ppl milk price increase for suppliers to Freshways – from 27th November    (25th November 2016)

This takes producers’ standard liquid litre price to 25.05ppl.

 

However, the plan is that any Freshways producers who have served notice to leave and supply another processor (mainly Yew Tree Dairies AKA Woodcocks) will not receive the 3ppl and will remain on the old Freshways basket price contract assuming they don’t rescind their notice.  Clearly during 2017 and at the earliest opportunity Freshways intends to abandon a farm gate milk price set by a basket of competitors some of whom today are dragging their feet big time!

 

This approach is nothing new and was taken by First Milk in 2010 when then Chairman Bill Mustoe stated “we should recognise the value of committed volume and therefore future price increases will only apply to members who are not under resignation”.

 

At that time there was lots of talk about discrimination, unfair trading practices and it being unreasonable but according to Ian’s notes nothing came of it and to be fair Mustoe had a point reference loyalty and commitment.

 

The fact those who rescind their notice will be offered the extra money is considered a bribe by at least one Freshways producer who is under notice.  Needless to say he is furious.

 

2.5ppl milk price increase for suppliers to The Fresh Milk Company (Lactalis) – from 1st January    (25th November 2016)

This takes producers’ standard manufacturing litre price to 28.47ppl.  (www.milkprices.com)

 

28.47ppl guaranteed minimum 2017 farm gate milk price from The Fresh Milk Company (Lactalis)    (25th November 2016)

Lactalis have nailed their colours to the 2017 farm gate milk price most having underwritten the minimum milk price the company will pay producers at 28.47ppl based on a manufacturing standard litre.

 

If prices head further North, producers will benefit and at least the move provides some welcome stability for the full 12 month period.  On a liquid standard litre price the equivalent guarantee is 27.5ppl.  The move has no doubt been triggered by the resignation of several FMC producers who are heading to supply Yew Tree Dairy (AKA Woodcocks).

 

2.5ppl milk price increase for members of Dale Farm plus a 2ppl winter bonus    (25th November 2016)

Dale Farms 2.5ppl increase is backdated to include October deliveries.

 

The additional 2ppl winter bonus will be paid over the 3 months of October, November and December.

 

2.25ppl milk price increase for suppliers to Pensworth Dairy (Southampton) – from January 1st    (25th November 2016)

 

2ppl milk price increase for suppliers to Wyke Farms – from 1st December (PRODUCER NOTIFIED)    (25th November 2016)

This takes producers’ standard manufacturing litre to 27.95ppl (www.milkprices.com)

 

1ppl milk price increase for suppliers to Crediton Dairy – from January 1st    (25th November 2016)

This takes producers’ standard liquid litre to 27ppl.  (www.milkprices.com)

 

GB milk deliveries down 10.1%    (25th November 2016)

Latest data in Dairy Market Weekly indicates in the 2 weeks to 12th November GB milk deliveries were down 10.1%.

 

Intervention store sales to start next month    (25th November 2016)

The European Commission intends to commence the offloading some of its 335,000 tonne record SMP intervention stock with an initial 22,150 tonnes which is likely to cool upward market movements.

 

The plan is for tendering for the 22,150 tonnes to start on the 13th December.

 

Muller faces frothing in its non-aligned milk pool  plus  Muller makes cost savings a major focus as losses reach £106 million    (25th November 2016)

Two headlines from two different articles in The Grocer Magazine, which numerous Muller non-aligned and many others claim are linked.  Muller lost £97.8m with its UK & Ireland business in 2014 and in 2015 those losses have increased to £106million.

 

Note, the additional losses cannot be attributable to the acquisition of Dairy Crest’s liquid business which didn’t complete until only 5 days from the year end on 26th December 2015.

 

Many are now pointing the finger to the suspicion that Theo Muller understandably wants a return on his investment and has sharpened his teeth.

 

There will be limited scope for Muller’s much loved retailer aligned contracts to reverse the losses given they are effectively toll processors for the supermarkets.

 

So that leaves the poor non-aligned farmers fearing they will be the weakest link and the ugly sister who will face further downward pressure including significant contract changes currently on the table.

 

Some farmers are claiming that Muller producers will stand up and be counted and have their say but history suggests they will huff and puff but they are unlikely to stop a determined Muller army of generals and puppets.

 

Muller Milk Group (MMG) Farmer Board member prosecuted    (25th November 2016)

According to an article in the Carmarthen Journal, Grant Hartman, who is one of 7 MMG Farmer Board members has been prosecuted, fined and given a conditional discharge for 18 months for moving cattle whilst the farm was under TB restrictions.

 

Farmers milk to be sold by ASDA from Dale Farm    (25th November 2016)

ASDA is the first supermarket to sell branded farmers milk giving consumers the option to pay an extra 25p per 4 pint carton with all the additional money going directly to 1300 dairy farmer members of Dale Farm.

 

The new milk went on sale in 16 ASDA stores on Monday of this week in both whole and semi skimmed.

 

How long will it be before AHDB’s market intelligence plus any other industry vermin put pen to paper criticising and belittling this latest initiative.  Heaven knows AHDB have caused unnecessary carnage with their criticism of the Morrison Milk for Farmers, which has now negatively attracted the attention of The Telegraph and The Express and The Times.

 

Arla launches branded organic milk     (25th November 2016)

Arla UK has launched a new brand Arla Organic Farm Milk, which is un-homogenised so customers will see the cream line at the top of the carton/bottle.

 

EU report talks of victims and unfair trading practices    (25th November 2016)

Ian doesn’t go big on reports originating from the European Commission, however, the one released this week by its Agriculture Markets Task Force titled “Improving Market Outcomes – Enhancing the position of farmers in the supply chain is worth a mention”

 

A large number of GB farmers currently facing new contracts and/or significant variations in their contractual terms as well as those on low milk prices should try to find time to read the report or at least the opening 4 page Executive Summary.

 

It looks at the realities of the new post milk quota world, which is labelled as a “more market-orientated” CAP.  It goes on to flag up and confirm the well known fact “there is a concern that farmers …… are becoming the main shock absorber in the supply chains as regards market risks such as price volatility or prolonged periods of low prices”.

 

A number of non-aligned liquid producers would say they are the last domino in the pack and first to fall over.

 

The report also highlights what it calls “the fear factor” farmers face if they wish to complain about a milk purchaser and the suggestion that victims of unfair trading practices (dairy farmers) should be able to lodge anonymous complaints.  If that happens Ian won’t receive all the juicy information because it will be directed to the Commission!

 

To see the report and its Executive Summary click on : https://ec.europa.eu/agriculture/agri-markets-task-force/improving-markets-outcomes_en.pdf

 

2ppl milk price increase for suppliers to Grahams Dairies (Scotland) – from 1st December  (18th November 2016)

 

2ppl milk price increase for suppliers to Paynes Dairies – from 1st December   (18th November 2016)

This takes producers standard liquid litre price to 24.80ppl (www.milkprices.com)

 

Muller under fire from its non-aligned suppliers  (18th November 2016)

Ian has been somewhat alarmed to receive a large number of emails this week from Muller non-aligned farmers who were very keen to report back from 4 of the first 5 regional producer meetings.  Rarely, if ever, has Ian received so much feedback, in fact. Given the fact there are several more meetings during the next 10 days Ian has decided to wait to see what comes in next week, and will discuss the comments and Muller’s proposals in the next bulletin, so please continue to send in your comments.

 

The meetings have certainly welded opinion in the Muller non-aligned producers and several have subsequently hit the keyboard. Literally. Several will now have big holes where the letters M,U,L,E and R once were.

 

The Muller staff and board members present at the meetings have certainly been given some very direct messages. The general view from the emails received is that the non-aligned see the contract changes as being nothing more than a price cut, heaping further pain and unfairness upon them. 

 

Ian will also comment on the proposed new producer representation structure and whether it is a step forward, particularly with reference to the non-aligned producers representation within the group of 21 and whether they will be represented, which the board of this group will select.

 

The Grocer Magazine on-line has summed up the situation with a very forthright article, written by Kevin White, with the headline “Muller facing frothing in its non-aligned milk pool”. The article points towards Muller pushing more of its own risk on to its 800 non-aligned farmers with the new contract. With Muller purchasing 30% of Britain’s milk this is a big issue and there will be many column inches written on the subject over the coming weeks and months.

 

GDT auction up 4.5%   (18th November 2016)

Tuesday’s auction produced another set of encouraging results with the overall product index up 4.5% compared to that recorded two weeks ago.  All products delivered increased in value, however, note the volume on offer was down 13.8% to 23,902 tonnes to that traded two weeks earlier.

 

The reduction is mainly attributable to Fonterra’s confirmation that milk volumes have plummeted during October (-14% and November)

 

Notable movers

Cheddar            +11% to average $3697 tonne

SMP                 +9.8% to average $2562 tonne

WMP                +3.2% to average $3423 tonne

 

Ian Potter, Grahams Dairies and the A & B deduction scheme   (18th November 2016)

During the past two of weeks I have commented on the A & B contracts, in particular in relation to processors who make milk price deductions to producers who, for various reasons, fail to deliver their full A litre allocation in a particular month.  With the decision by Freshways to abandon A litre deductions the focus moved north of the Border to Grahams Dairies, in Scotland. In late October I was quoted in The Scottish Farmer saying that Graham’s suppliers were given no notice of the A litre deductions. Grahams has asked me to clarify that it did give notice that there could be A litre deductions when they introduced the scheme in 2014 and the fact that A deductions were on the cards was also mentioned in a letter to Producers dated 17th August.  I accept this point and have offered my apologies to the company for inferring otherwise.

 

My comment regarding the lack of notice centred on the information that Graham’s suppliers were not notified that A litre deductions were on the cards for October deliveries until a letter was posted in mid October. However I have now been told that there will be no October deductions. This is excellent news for Grahams suppliers and a very positive step forward.

 

I also stated that the Grahams B Price was cut to 7ppl which was what Grahams told me it would be in July 2015. However having made enquiries I am now informed that the lowest price paid was actually 10ppl.

 

As part of Grahams robust defence of the business in the face of negative publicity I was provided with milk pricing figures from the company. The figures stated that the net average paid out to its farmers (including A and B prices) from October 2015 to September 2016 was 23.61ppl compared to its main Scottish competitors, Arla, Muller and First Milk who, according to the numbers I was given, ranged between 22.77ppl and 17.47ppl. I duly had these other figures checked by independent dairy analyst Chris Walkland, who has confirmed that the Grahams figure is accurate and the Arla and Muller figures, while not an exact match to his, are close enough. He did not analyse the First Milk figure.

 

Thus Grahams have, overall, paid what appears to be the highest 12 month average nett pay-out to dairy farmers in Scotland   even with the B scheme. Graham’s claim that the A & B scheme has succeeded in protecting their farmers’ milk price does, therefore, have merit.

 

However I believe that, despite this, the A & B scheme has not been well communicated by any of the companies who adopted it, including Grahams, and that the scheme has too many negatives attached to it. This is especially the case when compared to the simplicity of other companies who pay a single price for ALL of the litres, even if their headline price is not be as high as the A price would be. The effectiveness of the A & B deduction scheme can also easily be disproportionate across different farmers, with major unintended negative consequences on their businesses, again not helping the image of the scheme.

 

A & B contracts were believed to be ground-breaking when they were first conceived in 2014 but back then no one envisaged the current scenario whereby A litre deductions of 7 to 8ppl or more could be applied. A lot of time and effort went into the development of the new contracts but I believe that it is time to evaluate the pros and cons and either refine them significantly or revert to alternative mechanisms. The risk of bad press and farmer discontent on an A or B price deduction outweighs the value. Grahams have today confirmed to Ian that they are reviewing their A and B contracts on a one to one basis with producers to canvass their thoughts which is a positive time consuming move by the company which will give farmers the opportunity to have their say.

 

The bottom line is Grahams, like all other milk purchasers, have to balance supplies against sales and in the space of 14 months the spot price has varied from 10p to 41p making balancing extremely challenging. For Grahams the variation for them in that period has been from 20% (2 million litres) of milk above the A volumes (AKA B milk) to now, where production is 8% (1 Million litres plus) below A volumes.

 

It is a priority for the industry that a long-term solution to these swings must be found. But it is my view that the A & B system requires further reform if it is to have a role in that going forward.

 

Dairy farmers in Northern Ireland vent their anger  (18th November 2016)

An estimated 250 or so dairy farmers in Northern Ireland have had enough and have agreed to strike.  Part of their frustration is the lack of upward movement on farm gate milk prices in addition to anger at the stances taken by Dairy UK in connection with its decision to cease engagement with the Ulster Farmers’ Union.

 

The group stated “After the news this week that Dairy UK (NI) have blocked future engagement with the UIster Farmers’ Union over their criticism of the failure of co-ops to pass on better milk market returns to farmers, the contempt and arrogance that milk co-ops now have for their producer members is totally unacceptable and should result in co-op farmer board members requesting their co-ops withhold levies for now.”

 

Strong words but the only surprise is perhaps that it has taken this long to boil over.

 

30ppl for Direct Milk DPO (Ex-Dairy Crest liquid non-aligned) (11th November 2016)

In what is the penultimate monthly price calculation before Muller bin the mechanism and the DPO on 31st January 2017 producers will receive a standard litre price of 30ppl following a December 1st increase of 1.272ppl.  The details are:

 

Simplified & Core Formula          (29.89p)

Core Formula                             (30.08p)

 

In comparison the standard non-aligned liquid December milk price for Direct Milk DPO members is 22.675ppl.

 

These formula prices are the highest on record since November 2014.

 

2.25ppl milk price increase for Meadow Foods suppliers – from 1st December    (11th November 2016)

This takes producers standard liquid litre price to 24.40ppl (www.milkprices.com).  The Meadow Foods B price for November has been confirmed at 32ppl.

 

1.78ppl milk price increase for Dairy Crest Davidstow suppliers – From 1st December  (11th November 2016)

This takes producers standard manufacturing litre price to 26ppl www.milkprices.com

 

1.5ppl milk price increase for Yew Tree contracted liquid suppliers – from 1st December  (11th November 2016)

This takes producers’ standard liquid litre to 24.5ppl (www.milkprices.com)

 

0.75ppl milk price increase for Arla Direct suppliers – from 1st November   (11th November 2016)

This takes producers’ standard liquid litre price to 20.75ppl (www.milkprices.com)

 

Friesland Campina (FC) milk price for November deliveries @ 28.85ppl  (11th November 2016)

According to numbers crunched by Steve Bradley, the latest 3.75 Euro Cents per kg price increase from FC for November results in a www.milkprices.com standard litre equivalent of 28.85ppl.

 

Dairy Crest profits up 19%  (11th November 2016)

Dairy Crest’s half year adjusted profit before tax to 30th September 2016 is up 19% to £19.1 million compared to £16 million in the same period a year earlier.

 

Ornua Foods profits up 34% (11th November 2016)

Ornua Foods Ingredients (UK) (which includes the Adams of leek family and was and previously known as the Irish Dairy Board) have declared a 2015 operating profit up 34% to £1.85 million.

 

6ppl milk price rise takes Barbers price to over 30ppl   (4th November 2016)

Cheese maker Barbers have announced a thumping market-moving 6ppl milk price rise to its farmers, split into three increases as follows:

 

2.5ppl - 1st December

2.0ppl - 1st January

1.5ppl - 1st February

 

The increases will take the Barbers standard litre price to 30.30ppl on 1st February for its 130 farmer suppliers.

 

3.6ppl milk price increases for Freshways suppliers   (4th November 2016)

This is split into 2 parts:

 

The original 1.5ppl increase for October has been lifted to a 2ppl increase from October 1st

 

The original 1.1 ppl increase for November has been lifted to 1.6ppl from November 1st

 

In addition, a proposal will be put to Freshways customers that one of the farmer representatives be allowed to attend future meetings and negotiations.

 

 

2ppl milk price increase for suppliers to Belton Cheese - from 1st December    (4th November 2016)

 

2ppl milk price increase for Muller suppliers - from December 1st     (4th November 2016)

 

2ppl milk price increase for suppliers to Helers Cheese - from December 1st     (4th November 2016)

 

2ppl milk price increase for Muller Direct (ex-Dairy Crest) suppliers - from December 1st     (4th November 2016)

This takes producers standard liquid litre price to 22.93ppl (www.milkprices.com)

 

First Milk’s A litre milk price increases for November confirmed    (4th November 2016)

From 1st November First Milk’s A price increases will be as follows:

 

Midlands plus 1.41ppl

Haverfordwest & Lake District plus 1.33ppl

Scotland plus 1.2ppl

 

1.25 ppl increase for suppliers to Pensworth Dairies - from December 1st    (4th November 2016)

 

1ppl milk price increase for suppliers to South Caernarfon Creameries - from December 1st     (4th November 2016)

 

1ppl milk price increase for suppliers to Glanbia Cheesefrom December 1st(4th November 2016)

    

WMP GDT auction average jumps by 20% in 2 weeks    (4th November 2016)

The world’s barometer of demand for dairy products, the GDT auction, has clocked up an eye watering 19.8% average for WMP to average US$3317 tonne.

 

SMP average was up 6.5% to average US$2329 tonne and the overall all products average for this week’s auction was up 11.4%.  Let’s hope it’s a sustainable upward trend and not a spike.

 

Freshways abandon A litre undersupply penalties leaving Grahams exposed   (4th November 2016)

Freshways and its farmer representatives have agreed that under the present circumstances all A litre under supply penalties will be cancelled and they have backdated this to 1st October, which has been extremely well received by its 180 or so farmer suppliers and its customers. Note, this is not a temporary amendment to the contract but a permanent change.

 

Freshways have recognised that when the A & B contract was introduced a situation whereby some farmers could suffer huge financial penalties was never planned or envisaged. The move to scrap it has sent a clear message to Freshways suppliers that the firm is listening to farmers and keen to retain their supply by supporting them. Good on Freshways.

 

According to our records this leaves Grahams Dairies of Scotland as the only UK milkprices.com listed milk purchaser who, from October 1st, is penalising/deducting significant amounts of money from any of its farmers who fail to fulfil their A litres by what is currently an eye watering several pence per litre figure. There is a real possibility that there will be more on this story, as the issue is sure to run and run with a lot of questions being asked by Grahams suppliers, competitors who wish to seize on the controversy and potentially try to mop-up any disaffected suppliers, and by customers who are keen to see their processors treat their farmers fairly and well.

 

Our roving reporter is in Sicily, so this is a briefer report than usual & when he returns normal service will be resumed with some hard hitting facts etc  (4th November 2016)

 

1.5ppl milk price increase for suppliers to Paynes Dairies – from November 1st     (26th October 2016)

This takes producers’ liquid standard litre price to 22.8ppl (www.milkprices.com)    

 

1ppl milk price increase for suppliers to Dairy Partners Limited (Wales) – from December 1st     (26th October 2016)

This takes producers’ standard manufacturing litre to 25.7ppl (www.milkprices.com)

 

1ppl minimum price increase for all First Milk members – from November 1st    (26th October 2016)

First Milk have announced they will pay a minimum 1ppl increase on it’s A litres to all its non-aligned producers from November 1st.

 

Its B milk price will increase by 5ppl to 25ppl for all pools.  First Milk’s A price for November will be finalised and announced within the next 7 days.

 

Graham’s producers claim the goalposts have been moved   (26th October 2016)

Graham’s Dairies Scotland were last featured in this newsletter when they dramatically dropped their B milk price to only 7.5ppl and in doing so sending a very clear message to its suppliers that it simply did not want any B litres.  Farmers instantly responded by culling cows, cutting feed and cutting milk production.  In the past week, some have claimed that they also signed up to the EU milk reduction scheme, which started on 1st October.  And now another shock has come because Graham’s producers have received a bombshell letter - AFTER the 1st October! -  informing them that FROM October 1st any producer who failed to fill their A litres would be financially penalised!

 

For some it appears to be the final straw, who are still getting A litres at 22p, which is below their cost of production.  Some were furious and arranged a get together to meet fellow suppliers and to send a clear message to the Graham family as to how they feel about the treatment they are receiving.

 

Freshways are struggling with angry loyal producers    (26th October 2016)

According to numerous emails Ian has received, Freshways also have significant numbers of dissatisfied suppliers, many of whom claim to have already handed in their notice.  In summary, most, if not all, claim they are not being treated fairly and are being held to ransom by a combination of their milk buyer and their contract.

 

Most claim they are selling A litres at below COP, however, Freshways will not allow them to cut their losses and exit the industry with dignity, instead insisting they must give a minimum of nine months notice.

 

So irrespective of whether it’s ill health, poor profitability, old age, or simply that the farmers have had enough of what they call exploitation, its producers cannot stop milking.  No longer, apparently, can the Freshways farmer decide when he can sell his cows and even a TB breakdown is not a valid reason to exit dairy farming. And yet Freshways can serve notice when they like, as happened a few months ago!

 

In addition, along with Graham’s Dairies (see above), Freshways are one of only two dairies we know who penalise farmers for failing to fulfil their A litres. 

 

One claimed that when his A p