Dairy Industry news and features

This page was last updated on 24th September 2020 at 9.30am (Press your refresh/reload button for the latest information).

 

 

New Run Cattle Tag Prices

We supply a full range of all types of Cattle & Sheep tags at very competitive prices including

BVD, EID & Management tags – other combinations available please call for details

 

Cattle Tags - New Run Combinations

Retail Price

(excl vat)

Discounted

Price per

100+

(excl vat)

Discounted Price per 200+         (excl VAT)

Large & Large

£1.42

£1.37

£1.32

Large & Large BVD*

£2.42

£2.00

£1.95

Large & Button

£1.17

£1.12

£1.07

Large & Button BVD*

£2.42

£2.00

£1.95

Large & Medium

£1.42

£1.37

£1.32

Large & Medium BVD*

£2.42

£2.00

£1.95

Medium & Medium

£1.42

£1.37

£1.32

Medium & Medium BVD*

£2.42

£2.00

£1.95

Medium & Button

£1.17

£1.12

£1.07

Medium & Button BVD*

£2.42

£2.00

£1.95

Large & EID Secondary

£2.60

£2.55

£2.50

BVD Test

£2.15

-

 

BVD Test + BVD Free England

£2.40

-

 

 

*Excludes optional BVD testing charge

 

Please contact the office on 01335 320016 or email sales@ipaquotas.co.uk for more information, or visit our website http://www.ipaquotas.com

 

https://www.forfarmers.co.uk/dairy/dairy/youngstock.aspx

 

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

 

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

 

 

Ian Potter Marketing Services now has a new facebook page and can be found using the link below, follow the page to keep up to date with Bulletin News, Livestock Tag offers and Entitlements.

https://www.facebook.com/Ian-Potter-Marketing-Services-IPMS-Ltd-112735830193142/

 

 

 

 

0.5ppl milk price increase for Arla Members from 1st October – (24th September)

Arla’s conventional and organic milk standard manufacturing litre milk prices for October will increase by 0.5ppl.

This translates to a conventional manufacturing standard litre milk price of 29.76ppl and based on a liquid standard litre 28.66ppl

For Arla's organic members the manufacturing standard litre increases to 38.12ppl and based on a liquid standard litre to 36.7ppl.

Arla continue to lead UK milk buyers as they have throughout the past year and longer by giving early warning confidence signals to its members leaving most others trailing behind and scratching their heads. Its a positive signal as the winter starts and one which most will welcome and others will aspire to.

 

 

1ppl Milk Price increase for Wyke Farms (cheese) suppliers – from 1st October (9th September)

This increase takes producers manufacturing standard litre price to 29.014ppl and based on a liquid standard litre 28ppl.

 

This increase puts Wyke right up there with the best GB farmgate cheese prices a fraction behind Arla 29.26ppl (September price), Saputo/Dairy Crest 29.15ppl.

 

In a letter to its suppliers Wykes milk Procurement Director comments “Firm cheddar prices have allowed our sales team to increase prices into some of our UK customers, and our exports of cheddar are returning to a normal level.”

 

0.5ppl Milk Price increase for suppliers to Belton Farm (cheese) – from 1st October (9th September)

This increase takes producers manufacturing standard litre to 27.5ppl and based on a liquid standard litre to 26.75ppl.

 

0.3ppl Milk Price increase for suppliers to Medina – from 1st October (9th September)

This increase takes produces average contract liquid standard litre price to 26.05ppl.

 

South Caernarfon Creamery to stand on until 1st November (9th September)

This maintains producers manufacturing standard litre milk price at 28.03ppl and based on a liquid standard litre at 27.09ppl.

 

First Milk to stand on with its milk price until 1st November (9th September)

This maintains the Co-op’s manufacturing standard litre price at 28.15ppl including the member premium. For those members aligned to the Tesco cheese group the increase takes their manufacturing standard litre price to 29.65ppl.

Based on www.milkprices.com First Milks standard liquid litre the price increases to 27.25ppl.

 

Lactalis (AKA The Fresh Milk Company & Seriously strong cheese) (9th September)

are due to announce their 1st October to 31st December quarterly farmgate milk price within days. Currently for this month it remains at 28.11ppl based on a manufacturing standard litre.

 

www.milkprices.com July spot milk price weighs in at 29.41ppl (9th September)

This figure is used by several liquid processors as a reference point for farmgate prices.

Note the 29.41ppl is a delivered to the customer price from which a realistic 2.5ppl deduction for haulage, testing and a broker margin nets back to an ex farm equivalent of 26.91ppl.

 

www.milkprices.com compare this to the July 2019 average of 23.84ppl which was 3.07ppl lower than 2020 and compared to the June 2020 average (23.65ppl) it represents an increase of 3.26ppl.

 

 

GDT average falls for a fourth consecutive auction (9th September)

Last Tuesdays GDT Auction average fell a further 1% to average US $2955

The quantity sold was up 4,325 tonnes (+14%) to that sold only two weeks earlier.

However, despite the recent GDT falls Fonterra continue to hold its forecast farmgate payout.

 

The next Auction is on Tuesday next 15th September.

 

Roddas (clotted cream) deliver strong financials (9th September)

Roddas Cornish clotted cream 2019/20 year results are strong with turnover up £2 million (+5.6%) to £38 million and an operating income of £1.88 million with gross profit up to 24.7%.

 

Bank borrowing decreased from £4.13 million to £1.74 million

 

At farmgate level in Cornwall a Roddas contract remains a blue chip must have one.

 

During 2019/20 to date the farmgate liquid litre price has been very stable at 29.1ppl with an average actual milk price paid into its farmers bank account of 30.82ppl.

Roddas clotted cream is another internationally recognised quality brand which has certainly helped it weather the Covid storm to date. Farmers supplying the 130 year old family business should be encouraged by these latest results.

 

Arla’s machine continues to deliver impressive results (9th September)

For those in the dairy industry who use their prayer mats pointing to Leeds and Denmark hoping one day Arla will come unstuck the Co-op giant seems to go from strength to strength rarely putting a commercial foot wrong.

Its first half year results for 2020 were very strong in particular the sales of its branded products which recorded an impressive 10.4% growth.

Total revenue grew by almost £5 billion (5.4 Billion Euros/ + 2.8% with brands like Lurpak up by 20% and sales of Cravendale milk up 22%.

Arla’s UK sales increased by 4.7% to £1.2 billion with UK demand for Lurpak up over 20%.

The only black cloud is the regular and frustrating reference to the continued lack of profitability in the UK’s liquid milk sector.

During 2020 and the Pandemic the Arla member farmgate milk price has remained stubbornly stable consequently Ian has received a few if any complaints about Arla’s milk price from members with a heap of people keen to get Arla contracts by any means possible.

 

WANTED – AG 125 or 150 Hybrid Cubicle Spreader (9th September)

On an A Frame / 3 point linkage with Tilt / Self Loading. Photos and details to lydia@ipmsltd.co.uk

 

Organic certified calves available ex farm (9th September)

A new outlet is required for around 400 Autumn and Spring bull calves (Belgium Blue, Angus & Friesian crosses) located in Shropshire. They are certified organic which may or may not be relevant.

Anyone interested requiring further details please email miranda@ipmsltd.co.uk

 

 

AMPE & MCVE Calculation Uprade(28th August 2020)

 

Following its 3 year review of AMPE and MCVE, AHDB Dairy have reviewed the numbers and produced a revised calculation which takes into account increased average compositional quality, increased production costs etc.

 

Consequently, the AMPE and MCVE prices quoted above and going forward are based on the new calculation. Note neither calculation includes the cost of hauling milk from the farmgate to the dairy processor.

 

1ppl milk price increase for suppliers to Pensworth (Liquid) – from 1st September(28th August 2020)

 

This takes producers standard liquid litre price to 26ppl with no A and B pricing.

 

1ppl milk price increase for suppliers to Llaeth Cymreig (Welsh liquid) – from 1st September(28th August 2020)

 

We believe this takes producers standard liquid litre milk price to 26ppl (tbc) with no A and B pricing since June.

 

0.2ppl milk price increase for suppliers to Lancashire Dairies/Pakeeza – from 1st September(28th August 2020)

 

This takes producers base liquid standard litre price to 27ppl and when this is added to the bonuses, the vast majority of its producers qualify for e.g; grazing bonus it takes the standard litre price to a minimum of 28.5ppl with some ticking the boxes and achieving 30ppl plus. Note Pakeeza has no A and B pricing or a producer haulage charge.

 

1ppl milk price increase for suppliers to Glanbia (Cheese) – from 1st September(28th August 2020)

 

This takes producers standard manufacturing litre price to 27ppl and based on a liquid litre 26.1ppl.

 

0.5ppl milk price increase for suppliers to Saputo (AKA Dairy Crest) – from 1st October(28th August 2020)

 

The 1st September milk price negotiations between Dairy Crest Direct/DPO and Saputo didn’t end well, and the failure to agree the September milk price triggered deadlock and with that the option for any DCD producers to leave after 3 months.

 

This 1st October agreed 0.5ppl increase will likely mean no DCD/Saputo suppliers will actually leave to supply another milk buyer, especially given the new standard manufacturing litre price is 29.15ppl and based on a liquid standard litre 28.11ppl, hot on the heels of the key GB farmgate milk price pace setter, Arla, who currently stand at 29.26ppl and 28.17ppl respectively.

 

Wensleydale Creamery (Cheese) to stand on until 1st October(28th August 2020)

 

This maintains producers standard manufacturing litre price at 27.45ppl and based on a liquid litre 26.5ppl.

 

Barbers Cheesemakers to stand on until 1st November(28th August 2020)

 

This maintains producers standard manufacturing litre price at 28.8ppl and based on a liquid standard litre 27.8ppl.

 

Muller Direct (Liquid) to stand on until 1st November(28th August 2020)

 

This maintains producers standard liquid litre price at 25.25ppl plus the 1ppl additional payment taking it to 26.25ppl for the majority of Muller suppliers who qualify for the Muller Direct Premium.

 

Meadow Foods (Liquid) to stand on until 1st October(28th August 2020)

 

This maintains producers standard liquid litre price at 26ppl.

 

Paynes Dairies (Liquid) to stand on until 1st October(28th August 2020)

 

This maintains producers standard liquid litre price at 26ppl.

 

Wells Farm (Liquid) to stand on until 1st October(28th August 2020)

 

This maintains producers standard liquid litre price at circa 26ppl.

 

Yew Tree Dairy (AKA Woodcocks) to stand on until 1st October(28th August 2020)

 

This maintains producers standard liquid litre price at 26.1ppl.

 

Pattemores (Liquid) to stand on until 1st October(28th August 2020)

 

This maintains producers standard liquid litre price at 26.25ppl.

 

Dairy Partners to stand on until 1st October(28th August 2020)

 

This maintains producers standard liquid litre price at under 26ppl.

 

Freshways (Liquid) to stand on until 1st October(28th August 2020)

 

This maintains producers standard liquid litre price at 26ppl with clear evidence they are pushing for further increases in a bid to get farmgate prices to circa 27ppl+. The current cream price, if sustainable, should accelerate this goal, but it won’t be easy to achieve further liquid increases given current conditions.

 

Medina to stand on until 1st November(28th August 2020)

 

This is still to be officially confirmed but when it is, producers liquid standard litre price will be maintained at 25.75ppl. 

Meanwhile Medinas supply group of 19 farmers formally known as Meadow Milk and their lawyers claim they are waiting for Medina to put forward a proposal which is meaty enough to persuade them not to leave at the end of next month/ September 30th.

Meadow farmers supply in the region of 40% (circa 35 million litres) of the milk going into Watsons (Medinas) factory, which you may recall is due to be closed. For the past three months or so Meadow have had lawyers acting for them with significant financial support and additional legal expertise provided by the NFU and NFU legal.

The Legal advice received, which Medina contest, relates to the clause in the Meadow Milk contract that their farmgate milk price must not drop more than 2ppl below the average of a basket of prices including Mueller Direct, Freshways and Meadow Foods. On the basis Meadow claim the spring price dropped by more than 2ppl they have been advised they are free to leave after 3 months’ notice.

So, from October 1st, having served 3 months notice, the farmers believe, in the absence of an agreement with Medina, they are free to sell to another milk purchaser and several are showing keen interest particularly as milk supply is showing signs of tightening up/declining. Watch this space.

Note the Meadow Group has no connection whatsoever with Meadow Foods from Chester.

Market Snap Shot(28th August 2020)

 

The cream and spot markets continue to nudge slightly North, with Cream now trading at around £1.55 kg with spot milk rising to 30/31ppl.

 

A £1.55 kg cream price according to AHDB Dairy is worth 8.8ppl to a liquid processor assuming an average UK butterfat of 4.14% (current 12 month rolling average).

 

Note in April cream values were 90p kg worth only 5.1ppl to a liquid processor. So net gain in cream values is they are up 3.7ppl on these top and bottom figures but don’t assume all milk buyers get to keep this extra because several retailers have locked liquid processors into a price which means the retailer gets their grubby mitts on a chunk of the gains.

 

Most farmgate milk prices are now back to at least their pre Covid levels, but struggling to push on higher. The Eat Out Scheme has boosted demand and with schools returning, the next question is will that be a boost to dairy markets assuming school canteens return to normal?

 

Arla’s member milk price to stand on for September (21st August 2020)

Arla’s conventional and organic milk prices for September remain unchanged.

This translates to a conventional manufacturing standard litre milk price of 29.26ppl and based on a liquid standard litre 28.17ppl.

 

For Arlas organic members on organic contracts, the manufacturing standard litre remains at 37.62ppl and based on a liquid standard litre at 36.21ppl.

 

1ppl Milk Price increase for suppliers to Crediton Dairy (Liquid) - from 1st October  (21st August 2020)

 

This increase takes suppliers standard liquid litre milk price to a healthy 28.5ppl including the 0.5ppl Metrics bonus.

 

0.5ppl Milk Price increase for members of First Milk - from 1st September (21st August 2020)

 

This increases members manufacturing standard litre price to 28.15ppl including the member premium. For those members aligned to the Tesco cheese group the increase takes their manufacturing standard litre price to 29.65ppl.

Based on www.milkprices.com First Milks standard liquid litre the price increases to 27.25ppl.

 

0.9ppl Milk Price increase for suppliers to Cotteswold (Liquid) – from 1st September (21st August 2020)

 

The claim is this will put producers Milk Price to 0.5ppl above its pre Covid level. The estimated standard liquid litre price is 25.5ppl and we are endeavouring to obtain an accurate benchmarked price from Cotteswold.

 

Freshways to stand on until 1st October  (21st August 2020)

 

This maintains producers liquid standard litre price at 26ppl following a 1ppl 1st August increase.

 

 

GDT Auction prices decline for the third consecutive Auction (21st August 2020)

 

This Tuesday’s Auction recorded on average all products reduction of 1.7% to average US $3004 tonne and follows earlier falls of 5.1% (4th August), 0.7% (21st July) however the 7th July recorded a whopping 8.3% jump.

 

The quantity traded this week was a factor with 33,331 tonnes sold.

 

The only product to increase in value was SMP up +1.1% to average US $2,608 tonne.

 

The increases in Butter, Cheddar and SMP recorded at the 7th July 8.3% rise have now been annihilated and wiped out as this weeks prices fell to their lowest level for 2 months.

 

England & Scotland Milk Supply balance sheet (21st August 2020)

 

AHDB Dairy calculate that during 2019/20 England was 88% self sufficient in milk with 56% of farm output going to liquid and 19% to Cheese.

 

Turning to Scotland during 2019/20 they calculate 18% of all Scottish on farm milk had to be transported to England for processing totalling 269 million litres. This equates to 9,440 x 28,500 litre loads a year or 26 loads every day of the year.

 

Around 190 million litres of this milk was trucked South by Muller with the rest by Yew Tree and First Milk.

 

This transport comes at a significant cost. If you take an average haulage cost of £500 from say Glasgow to say Manchester that calculates to 1.75ppl and added to the on farm collection charge will give circa total transport costs of 2.6/2.7ppl.

This can only be described as spare/surplus milk and at £500 a load is costing a tasty £4.7 million a year.

 

51,000 Cows less as GB milking herd decreases (21st August 2020)

 

According to AHDB Dairy at July 1st GB dairy cow numbers reduced by 2.9% (51,000 cows) to 1.68 million compared to the numbers recorded at 1st July 2019.

 

Against this youngstock numbers have risen which is the first rise in numbers since October 2016.

 

AHDB estimate 25% of GB Diary farmers had to cut milk output as a result of Covid19 and culling was an instant and effective way to cut production as requested by several liquid processors.

 

Having said that there is no real shortage of milk at present with spot prices fairly level at 28/29ppl delivered in.

 

Dairy response fund/Aid application window extended by 1 month (21st August 2020)

 

Any dairy farmers who qualify for the governments Dairy Aid who haven’t applied now have an additional month to apply with the new deadline of 11th September. The maximum award remains capped at £10,000 and the 174 applications received to the end of July are not even 10% of the numbers some initially trumpeted to be severely affected by Covid19.

 

Cathedral City Cheese on sale in Canada (21st August 2020)

 

Saputo, who purchased the Dairy Crest cheese business its brands and Davidstow processing facility are now exporting the UK’s leading cheese brand Cathedral City to its motherland Canada where it is available in 500 stores.

 

The good news is Cathedral City cheese is all made in Davidstow Cornwall from milk supplied by 350 local farmers.

Many years ago, Ian had intelligence from down under that Dairy Crest were exploring the possibility of manufacturing Cathedral City there. It didn’t happen and let’s hope Saputo continue to market it as produced 100% from English West Country milk.

 

Ornua Foods UK (First Milks partner) 2019 results were solid(21st August 2020)

 

Ornua Foods UK who market First Milks cheese output has released its 31st December 2019 results which were solid and consistent.

 

            Turnover up 10% to £354 million

            Pre Tax profit £4.1 Million (£6.8m in 2018) the reduction mainly due to investment in the business.

 

 

 

 

**Breaking News** - Additional news just in & amended Muller Direct milk price (see below in red) (5th August)

 

Belton Farm (Cheese) to stand on until 1st October(5th August)

 

This maintains producers manufacturing standard litre price at 27ppl and based on a standard liquid litre at 26.25ppl.

 

Meadow Foods (Liquid) to stand on until 1st September(5th August)

 

This maintains producers liquid standard litre price at 26ppl across all Meadow contracts and regions.

 

GDT Auction down 5.1%(5th August)

 

Todays GDT Auction fell by an average 5.1% today which was more than a bit of a shock.

 

Notable were:

 

WMP down 7.5% to average US $3003 tonne

Cheddar down 5.3% to average US $3568 tonne

SMP down 4.6% to average US $2583 tonne

Butter down 2.8% to average US $3438 tonne

 

1.25ppl milk price increase for suppliers to Pattemores (liquid) from August 1st takes producers back to pre Covid 19 level(4th August)

 

During May (24ppl), June (24ppl) and July (25ppl), Pattemores ex farmgate milk price fell to the levels in brackets but from the 1st August is back up to its pre Covid 19 level of 26.25ppl based on a liquid standard litre price.

 

1ppl milk price increase for farmers supplying Medina – from 1st September(4th August)

 

This latest increase puts Medina’s average contract liquid standard litre price to 25.75ppl and getting much closer to its main competitors.

 

Note the above story was posted on our website & Facebook on Monday 20th July

 

1ppl milk price increase for suppliers to Pensworth (liquid) – from August 1st(4th August)

 

This increases producers liquid standard litre milk price to 25ppl and is paid on 100% of the milk supplied with no A and B pricing.

 

Crediton Dairy (liquid) to stand on until 1st October(4th August)

 

This maintains producers liquid standard litre milk price at 27.5ppl.

 

Muller Direct to stand on until 1st October – Amended(5th August)

 

This maintains producers liquid standard litre price at 25.25ppl plus 1ppl to 26.25ppl for suppliers who qualify for the Muller Direct Premium.

 

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

 

This increases producers manufacturing standard litre milk price to 26ppl and based on a liquid standard litre to 25.14ppl.

 

0.2ppl milk price increase for suppliers to Wensleydale Creamery (cheese) from 1st August(4th August)

 

This increases producers manufacturing standard litre milk price to 27.45ppl and based on a liquid standard litre to 26.5ppl.

 

1ppl milk price increase for suppliers to Barbers Cheese makers – from 1st September(4th August)

 

This increases producers manufacturing standard litre milk price to 28.8ppl and based on a liquid standard litre to 27.8ppl. Note this increase ends on impressive 10 month stable farmgate price at 27.8ppl (26.8ppl).

 

The boost is attributable to the Covid 19 increase in demand for cheddar resulting in tight supply and improving prices. As stated in Barbers August farmer newsletter “These gradual improvements in cheddar returns supports this price increase delivery to our dedicated suppliers (farmers) from September”.

 

Saputo (AKA Dairy Crest Davidstow) stand on until 1st October which triggers deadlock with DCD(4th August)

 

The Saputo’s manufacturing standard litre price will remain at 28.65ppl for September deliveries and based on a liquid standard litre at 27.63ppl.

 

Saputo have surprisingly stood firm on its September farmgate milk price and decided not to reward its farmers with any additional money following its incredible Covid 19 sales figures (see below).

 

Saputo’s sales of its flagship branded cheese, Cathedral City, have seen revenue up a staggering 36% with sales volume up 27%.

 

This stand on position was not agreed with DCD, who understandably felt the firms results and gains should be shared with the farmers and not squirreled away.

 

The lack of agreement/deadlock means any producer can leave after 3 months’ notice and whilst three claim to have an alternative milk purchaser, the options look limited to those who might want to move and the Saputo head honchos will know that.

 

No doubt the DCD statement in its latest Newsletter declaring the DCD board is planning to submit a response to the DEFRA contracts consultation will be more spicy as a result of the recent deadlock. However, the deadline for submissions is not until September 15th and by 1st September a fair and justified price increase from Saputo might quell the disgruntled farmers and dilute their final submission to DEFRA.

 

0.25ppl Milk Price increase for suppliers to The Fresh Milk Company (AKA Lactalis) – from 1st September(4th August)

 

This increase takes producers standard manufacturing litre milk price to 28.11ppl and based on a standard liquid litre to 27pplppl.

This is the second consecutive monthly price increase from the Cheese processor whose flagship brand is seriously strong cheddar.

 

South Caernarfon Creamery to stand on until 1st October(4th August)

 

This maintains producers manufacturing standard litre milk price at 28.03ppl and based on a liquid standard litre at 27.09ppl.

 

Pakeeza/Lancashire Farms milk price returns to its pre covid level of 26.8ppl for its 40 or so direct suppliers – from August 1st PRODUCER NOTIFIED(4th August)

 

Arla’s member milk price to stand on for August(4th August)

 

Arla’s conventional and organic milk prices for August remain unchanged.

This translates to a conventional manufacturing standard litre milk price of 29.26ppl and based on a liquid standard litre 28.17ppl.

 

For Arla members on organic contracts, the manufacturing standard litre remains at 37.62ppl and based on a liquid standard litre at 36.21ppl.

 

Note the above story was posted on our website & Facebook on Monday 20th July

 

Cheese has had phenomenal success during the pandemic(4th August)

 

An article by Kevin White of the Grocer highlights how sales of cheddar have rocketed and quotes the Marketing Director of Cathedral City (AKA Saputo) “Its been a phenomenal period of trading – everyone’s been so busy… we were on daily calls with our supply chain to make sure we kept supplies on shelf”.

 

For the first time Cathedral City sales hit £305 million on an annualised basis.

 

Across the board the overall average price of cheese increased by a margin according to Kantar with market leader Cathedral City way out in front clocking up £22 million in extra sales revenue. Average cheese consumption increased by 48% during lockdown.

 

AHDB report mild cheddar markets at a 21-month high with the PTF reporting mature cheddar at a 19 month high.

 

The Market(4th August)

 

Cream prices briefly came close to hitting £1.50 but appear to have settled at £1.41 to £1.43.

 

Meanwhile spot is holding fairly stable at 27 to 31ppl, but note that’s a delivered to the buyers factory spot price.

 

Medina to close Watsons Dairy – Hampshire reducing liquid processing capacity by 200 million litres(4th August)

 

It has been rumoured for several months and today Medina have confirmed it is to close its Watsons fresh liquid processing capacity with the potential loss of 144 jobs.

The capacity of the site is around 200 million litres but at present is running at less than 50%.

The milk will be will be diverted to Buckleys (Huddersfield), Severnside (Gloucestershire) and Freshways in Acton, London who in the press release are described as Medina’s processing partner. Farmer suppliers and Medina customers will not be affected.

Note the above story was posted on our website & Facebook on Monday 20th July

 

Arla and Sainsbury’s in joint Beef Programme(4th August)

 

Arla have announced a voluntary Angus Cross beef scheme with Sainsbury’s to help its ‘every calf has a value’ policy.

It is understood, calves will be a minimum 10 days and maximum 41 days old and will be centrally collected and go to Blade farming with the eventual destination of ABP.

 

Qualifying heifers will be paid out of £156 and bulls £242 if they are sired by one of two Genus Angus bulls.

The scheme is voluntary and open to all Arla farmers. However, the mirror image scheme Sainsbury’s are imposing on its aligned Dairy Development Group farmers (Arla and Muller) is a very contentious matter, which has a number of farmers steaming. More on that in Ian’s next dairy farmer article.

 

Arla’s marketing team are selling sweet country air in bottles(4th August)

 

At first, Ian took a double take on this latest Arla idea, but then realised it might not be such a daft marketing idea and could even catch on.

 

Arla have produced a limited edition bottle of fresh country air scent to be used with mini fragrance sticks, a promotional idea supported by Ben Fogle, Countryside broadcaster.

 

Its part of Arla’s marketing plan and this time the message to consumers is that many Arla farmers have changed how they spread slurry and instead of the smell of freshly spread slurry, consumers should smell the fragrance and its combination of country meadows and hedgerows.

 

A secondary target audience is for the idea to inspire more Arla farmers to think about how they spread their slurry and to consider alternatives to traditional spreading methods.

 

The promotion is another to raise the profile of the Arla brand with British Consumers and boost its reputation for launching innovative sustainable ideas. Its another piece in the Arla marketing jigsaw, promoting the positive image and stories from Arla farmers to join others including bee and pollinator pit stops and the Magic Breakfast educating school children about modern sustainable dairy farming.

 

It’s not for sale but given how much these fragrances sell for online, Arla should perhaps explore sales opportunities. It would sort out Mrs P’s Xmas present for sure!

Arla’s member milk price to stand on for August(20th July)

 

As expected, Arla’s conventional and organic milk prices for August remain unchanged.

 

This translates to a conventional manufacturing standard litre milk price of 29.26ppl and based on a liquid standard litre 28.17ppl.

 

For Arla members on organic contracts, the manufacturing standard litre remains at 37.62ppl and based on a liquid standard litre at 36.21ppl.

 

1ppl milk price increase for farmers supplying Medina – from 1st September(20th July)

 

This latest increase puts Medina’s average contract liquid standard litre price to 25.75ppl and getting much closer to its main competitors most of whom have yet to announce a 1st September farmgate price.

 

Medina to close Watsons Dairy – Hampshire reducing liquid processing capacity by 200 million litres(20th July)

 

It has been rumoured for several months and today Medina have confirmed it is to close its Watsons fresh liquid processing capacity with the potential loss of 144 jobs.

 

The capacity of the site is around 200 million litres but at present is running at less than 50%.

 

The milk will be will be diverted to Buckleys (Huddersfield), Severnside (Gloucestershire) and Freshways in Acton, London who in the press release are described as Medina’s processing partner. Farmer suppliers and Medina customers will not be affected.

 

Liquid Processor Milk Price Increases

 

1ppl Milk Price increase plus fixed price offer for suppliers to Paynes Dairies (Liquid) – from 1st August   (17th July 2020)

This increase takes producers standard liquid litre milk price to 26ppl with no A and B differential pricing. In addition, Paynes are offering a further fixed priced contract at 26.5ppl for a 12-month period on behalf of a customer.

 

Last time Paynes offered a fixed price contract it took a beating in British Dairying for being too low at 27.5ppl for 12, 18 or 24 months duration. Well for those who took a slice it has certainly proved to be a sensible move. This offer might not have Paynes farmers queuing up in droves but no-one can predict the future whether 26.5ppl is the right hedge to take.

 

1ppl Milk Price increase for suppliers to Meadow Foods in South Wales, Cumbria and Lancashire – backdated to 1st July (17th July 2020)

This brings this group of producers back in line with Meadows other contracted producers in Cheshire, Staffordshire, Derbyshire, Shropshire, North Wales, Yorkshire and Worcestershire some of whom feared they were the poor relation potentially in for the chop.

The Meadow all contracts 1st August liquid standard litre price for 1st August is 26ppl.

 

1ppl Milk Price increase for suppliers to Wells Dairy (Liquid) – backdated to June 1st  (17th July 2020)

Wells decided some weeks ago pay increases based on results and this 1ppl takes its producers standard liquid litre price to 25ppl and for a June 1st price is very much back in the mix and embarrassingly ahead of a few of its liquid middle ground competitors especially given this is paid on 102.5% of output. Infact two liquid processor statements Ian has seen paid under 20ppl for June milk!

 

 

1ppl Milk Price increase for Suppliers to Yew Tree Dairy – from August 1st  (17th July 2020)

This is an increase to the Yew Tree A litre price (63%) and takes producers standard liquid litre price to 26.1ppl. The July B price (37%) for Yew Tree Suppliers will easily be north of 25ppl and rising we hope.

 

1.25ppl Milk Price increase for suppliers to Cotteswold Dairy (Liquid) - from 1st August – PRODUCER NOTIFIED    (17th July 2020)

The liquid standard litre appears to be a closely guarded secret but is circa +/- 25ppl.

 

 

Cheese processor Milk Price increases

 

 

1ppl Milk Price increase for suppliers to Wyke Farms Somerset (Cheese) – from 1st of August   (17th July 2020)

This increase takes producers standard manufacturing litre price to 27.97ppl and based on a liquid standard litre to 27ppl.

Wyke report the recent price increases its sales team have achieved with a number of its UK customers have contributed towards this increase.

 

0.25ppl Milk Price increase for suppliers to The Fresh Milk Company (AKA Lactalis) – from 1st August    (17th July 2020)

This increase takes producers standard manufacturing litre milk price to 27.86ppl and based on a standard liquid litre to 26.5ppl.

 

Market Summary, Arla Expectation and Next Bulletin

 

For liquid suppliers a 26ppl standard litre price by 1st August is viewed a minimum and any falling below this level, with spot trading at 30ppl up or very close, must be challenged.

A cheese manufacturing standard litre of 28ppl or thereabouts by 1st August should also be the norm.

 

Arla have led GB milk prices for many months and are due to announce their August 1st milk price next week.

Given Arla’s July milk price announcement included reference to stabilisation of prices “the current outlook overall is looking stable” the expectation will be for Arla to stand on for August.

Once announced this will be confirmed on our website and facebook page and if it is no change the next bulletin will be on either Friday the 31st July or Monday 3rd of August unless some sensational news breaks in between.

 

Butter futures sets a new daily record   (17th July 2020)  

The EEX (European Energy Exchange) last Friday achieved a new daily trading record with 644 contracts executed in the day totalling 3,220 tonnes.

This eclipsed the previous days record set on the March 4th of 433 contracts involving 1055 tonnes.

 

South Caernarfon Creameries Ltd (SCC) former Co-op reports solid financial performance   (17th July 2020)

The West Wales Co-operatives 2019-20 Annual report front cover features its successful hand-crafted Dragon brand cheese with the strap line “Proudly owned by our farmers” which probably sums up the business.

 

Record sales with higher volumes of cheese from its 134 members who average 1 million litres each are the key take outs. As with most if not all GB Dairy Co-ops SCC had no producer resignations in the year.

To be fair to SCC the report is up front that competitor Co-op Arla was way out in front during the year paying in remarkable 30.25ppl based on a manufacturing standard litre.

SCC averaged 27.78ppl which was on above average milk for cheese farmgate milk price.

Key indicators from the report were:

            Turnover up 21% (£11.3m) to £64.2 million

            Operating Profit down 14% (£300,000) to £1.9 million

            Capital invested up 88% (£700,000) to £1.5 million

            Net Debt down 24% (£3.6million) to £11.3million

 

First Milk farmer Co-op records solid performance  (17th July 2020)

It seems the days of GB Co-op’s all recording real success are well and truly here.

First Milks Annual report and Accounts to 31st March 2020 are once again a very bright light with its progress and positive position significantly bolstered by its successful partnership with its main customer Ornua as well as other customers/partners for example Nestle and Yeo Valley.

 

Key indicators from the report:

            Turnover up 4% to £282.8 million

            Operating Profit up 4% to 7.5 million

            Net debt down 20% to £33.1 million

            Pension liability down 78% from £6.8 million to only £1.5million

First Milk has 700 members and processed 800 million litres of milk in the year with no member resignations and a que of people who want to join.

 

 

 

Today’s GDT Auction jumps a whopping 8.3%(7th July)

 

The average all products price at todays GDT Auction jumped from US $2979 tonne to US $3197 tonne, a whopping 8.3% in three weeks.

 

In terms of the total quantity sold it was up 4,278 tonnes (+20%) with the number of participating buyers also up from 166 to 174 compared to the auction 3 weeks ago.

 

The big movement was in the WMP price up 14% from $2829 to $3208 tonne with all products returning positive gains.

 

Notable movements were:-

WMP + 14% to average $3208 tonne

SMP + 3.5% to average $2694 tonne

Cheddar + 3.3% to average $3762 tonne

Butter + 3.0% to average $3717 tonne

 

This is the fourth consecutive increase and takes the GDT index to 996, extremely close it its February 2020 level of 1007.

 

Liquid Movements

 

1.5ppl milk price increase for suppliers to Medina (Liquid) – from 1st August(7th July)

 

This takes the average Medina contracted liquid standard litre price to 24.75ppl, which is a welcome and desperately needed return to the pre Covid February 2020 level.

 

Medina were and indeed still are hit as hard as anyone by the dramatic drop in milk going to its catering and hospitality customers which is by no means back to “normal” and many in the industry believe the new normal will not be seen until 2021.

 

1ppl milk price increase for Pattemores (Liquid) suppliers – July 1st(7th July)

 

 

This takes Pattemores standard liquid litre price to 25ppl.

 

1ppl A milk price increase for suppliers to Pensworth (Liquid) from 1st July(7th July)

 

This increases producers liquid standard litre price to 24ppl  for 80% of the A milk, the remaining 20% B price is based on skim and cream market returns which are now much improved and at the moment stable to firm.

 

Muller Direct to stand on until 1st August (7th July)

 

This maintains producers liquid standard litre price at 25.25ppl plus 1ppl to 26.25ppl for farmers who qualify for the Muller Direct Premium.

 

Paynes Dairies to stand on until 1st August(7th July)

 

This maintains producers standard liquid litre price at 25.0ppl.

 

Grahams Dairies (Liquid/Scotland) to stand on until 1st August(7th July)

 

This maintains producers standard liquid litre price at 25.5ppl.

 

Crediton Dairy (Liquid) to stand on until 1st September (7th July)

 

This maintains producers liquid standard litre price at 27.5ppl.

 

Llaeth Cymreig (Liquid) to stand on until 1st August(7th July)

 

The purchasers A and B pricing model was dropped from June 1st to be replaced by a single price of 25ppl based on a liquid standard litre TBC. The July milk price will be a stand on at 25ppl.

 

Meadow Foods – Yet to declare their July milk price(7th July)

 

This means if the June price prevails it will be 24ppl based on a liquid standard litre for Cumbria and South Wales suppliers and 26ppl to Meadows North Wales, Staffordshire, Shropshire and Cheshire producers.

 

That’s the minimum July price and fingers crossed it could be more!

 

Cheese Movements

 

0.75ppl milk price increase for members of South Caernarfon Creameries (Cheese) from 1st August(7th July)

This increases producers manufacturing standard litre price to 28.03 ppl based on a liquid standard litre price to 27.09ppl.

At over 28ppl the co-op appears to be handing over the benefits gathered from the market place to its members at the earliest opportunity.

The catalyst for this increase is the UK cheddar and hard cheese market which continues to improve.

Lactalis to hold producers July milk price with the 1st August price due this week(7th July)

 

Lactalis have held producers standard manufacturing milk price at 27.61ppl for July and based on a standard liquid litre at 26.5ppl.

 

The announcement of the 1st August Price will be made this week.

 

Barbers (Cheese) to stand on until 1st September (7th July)

 

This maintains producers manufacturing standard litre price of 27.79ppl and based on a liquid standard litre at 26.8ppl.

 

This is the 10th consecutive month Barbers have held this milk price which is a remarkable achievement given the turmoil the industry has witnessed.

It’s a near certainty the next Barbers milk price move will be up as the market continues to nudge up positively.

 

Glanbia Cheese suppliers to stand on until 1st August (7th July)

 

This maintains producers standard manufacturing litre price to 25ppl and based on a standard liquid litre 24.17ppl.

 

Belton (Cheese) to stand on until 1st September(7th July)

 

This maintains producers manufacturing standard litre price of 27ppl and based on a liquid standard litre at 26.25ppl.

 

Wensleydale Creamery (Cheese) to stand on until 1st August(7th July)

 

This maintains producers standard manufacturing litre price at 27.25ppl and based on a liquid litre at 26.3ppl.

 

Saputo (AKA Dairy Crest) to stand on until 1st September (7th July)

 

This maintains producers manufacturing standard litre price at 28.65ppl and based on a liquid standard litre 27.63ppl.

 

First Milk to stand on until 1st September (7th July)

 

This maintains members standard manufacturing litre price at 27.63ppl and based on a liquid standard litre at 26.75ppl.

 

AMPE/MCVE and The Market(7th July)

 

National production continues to run lower than 12 months ago which is a blessing, meanwhile several milk purchasers are now regretting their instruction for producers to cut production.

 

Spot milk continues to trade in the high 20p’s, mainly 27 to 29ppl and has hit 30p plus recently, with allegedly the top prices being paid by the Dairy Industries least popular milk buyer, who is desperately short of milk.

 

Cream values continue to nudge North and trading at £1.40 to £1.41.

 

Butter, SMP and Mild Cheddar values all increased in June.

 

The AMPE value (see the table above) is up a staggering 4.8ppl in the month to 29.37ppl, whilst MCVE continues to nudge up and stands at 30.89ppl.

 

Both AMPE and MCVE stand higher than they did for June 2019.

 

Note AMPE is derived from the value of SMP and butter whilst MCVE is derived from mild cheddar and whey powder/butter values.

 

1st Dairy Promotional TV advertising for 20 years(7th July)

 

Congratulations to those who have supported and funded the first Dairy TV advert in 20 years which is running now until the middle of the month to be shown during Emmerdale, Coronation Street, Saturday Morning with James Martin etc. Called ‘Milk Your Moments’, it’s a nostalgic look back at dairy over the years. The adverts are part of a comprehensive media and PR plan.

 

The success of the campaign and its value for money will be carefully monitored.

 

To view the advert, click the link below:

 

https://www.youtube.com/watch?v=vCVZb_OcRK4

 

0.63ppl Milk price reduction for Arla members from July 1st(24th June)

 

This reduces the standard liquid litre price to 28.17ppl and based on a manufacturing standard litre price of 29.26ppl.

 

Arla members organic milk price also reduces from July 1st by 1.3ppl, resulting in a standard liquid litre price of 36.21 and 37.62 on a manufacturing standard litre.

 

The Arla non-member/direct supplier conventional price for July will be held at 25.5ppl.

 

Whilst the majority of non-Arla suppliers together with Arla members had hoped for a stand on July price, the reality is that if we all look back over Arla’s 2020 milk pricing, it has been a remarkable result to date. According to our records, since January 1st the net reduction (on Arla’s conventional milk price) is 0.66ppl excluding currency adjustments and that includes todays 0.63ppl reduction. Even when currency adjustments are included, which amount to 0.26ppl the net reduction as of the 1st July is a 0.92ppl downward movement.

 

The Arla organic milk price has been hit by Covid19, in particular, the total shut down of McDonalds, who are Arla’s largest UK organic milk customer.

 

The net position for Arla’s organic supplier for the 1st January 2020 is an overall reduction of 3.14ppl excluding currency adjustments which amount to a reduction of 0.27ppl, which when the two are added together makes a total reduction of 3.41ppl.

Dairy Hardship Application Window opens today – (18th June)

The dairy hardship/Aid application window is open today with eligible English farmers able to apply once for up to £10,000 of financial support following the coronavirus outbreak.

All applications via the RPA and if successful pay-outs will start on 6 July. The application deadline is August 14th.

 

 

1ppl milk price increase for Grahams Dairies (Scotland) suppliers – from 1st July(16th June)

 

This results in a standard liquid litre price of 25.5ppl and in the letter informing producers MD Robert Graham confirms his reading of the market is positive and he is “cautiously optimistic”.

 

Cream has rocketed up and Robert quotes 135 to 140 kg and it has been higher.

 

Two milk price increases for Medina suppliers(16th June)

 

From 15th June an extra 1ppl.

From 1st July an extra 1.5ppl.

 

This takes the average standard liquid litre across the various Medina contracts to 23.25ppl.  Whilst not a great price and still one of the lowest for a medium sized liquid processor, it’s moving up and it is paid on all litres with no Medina B price. Note it is highly unlikely any Medina farmers will qualify for the governments dairy hardship fund.

 

Finally, Medina normally pay producers weekly on a 5-week cycle which was extended to 8 weeks during the peak lockdown and has now been reduced to 7 weeks from June 5th.

 

1.1ppl curiously delayed price increase for suppliers to Joseph Heler (Cheese) from 1st August(16th June)

 

Helers cheese in a letter dated 3rd June notified its producers of a 1.1ppl milk price increase from 1st August. Helers decided several years ago not to provide information to www.milkprices.com and others in order to enable standard liquid and manufacturing prices to be compared, so these are unavailable.

 

That apart, Helers producers are not all asleep and have been quick to notice the following:

 

·         Letter dated 1st March 2019 with 30 days advance notice of a 0.75ppl price reduction from 1st April.

·         Letter dated 30th August 2019 with 32 days advance notice of a 1ppl price reduction from 1st October.

·         Letter dated 30th April 2020 with 32 days advance notice of a 1.1ppl priced reduction from 1st June.

·         Letter dated 3rd June 2020 with 59 days advance notice of a 1.1ppl priced increase from 1st August.

 

This producers comparison requires no further illumination or explaining. The positive is the increase, the reality is it’s a 30 day notice for price reductions and now at a time when the market is bouncing up, this increase has been given a 59 day producer notice. Note there is a commitment to review this increase and any further improvement in market conditions could result in this 1st August price further increasing. Which Ian reckons it should do, particularly given the fact Helers Cheese were the only price reduction for June 1st. 

 

Wyke Farms (Cheese) to stand on for June (16th June)

 

This maintains a manufacturing standard litre price of 26.94ppl and based on a liquid standard litre of 26ppl.

 

Milk Quotas return for Pensworths Liquid Milk(16th June)

 

Ian had to verify the claim that Pensworths liquid milk was restricted to only 2 litres per customer on the 5th June in Potterne (no, Ian doesn’t have any connection) near Devizes. Unbelievable, especially given Pensworths low ex farmgate milk price.

 

27.6ppl was the average farmgate milk price in April(16th June)

 

DEFRA have provisionally calculated the average farmgate milk price for April deliveries at 27.6ppl. That must be the widest gap on record, with some farmers (see below) paid 10/11ppl and others paid more than 3x this amount. Compared to the April 2019 average price, the reduction was 2.2%.

 

Mirror mirror on the wall, who paid the lowest milk price of all? (16th June)

 

For some time, Freshways have dominated the negative UK Dairy press for numerous well reported reasons.

 

However, other milk purchasers appear to have almost snook under the radar, having paid some of the lowest prices in the UK during this challenging period.

 

One is Llaeth Cymreig who paid several producers in April between 10p to just over 12p including a B litre payment for the month of only 5ppl. In fact, at least one producer was paid under 10pp on Aprils milk.

 

These producers will certainly qualify for the Dairy Aid having received a February average price paid of 26 to 27ppl. There are reports of other milk buyers paying 15p or less in total.

 

Ian would be interested to hear from producers who received similar April and/or May average ppl prices on a strictly private and confidential basis.

 

GDT Auction average up 1.9% today(16th June)

 

Notable movements were:

 

-       SMP + 3.1% to average US $ 2609 tonne

-       WMP + 2.2% to average US $ 2829 tonne

-       Cheddar + 1.4% to average US $ 3631 tonne

 

Extremely Cheap Milk from Morrisons(16th June)

 

Congratulations to an eagle-eyed reader who spotted an incredible deal offering 1 box of cereal with 4 pints of semi skimmed milk for only £1.25. Maximum 20 per customer

 

Dairy Farmer Hardship applications open on 18th June(4th June)

 

Following on from last nights (Tuesday) news story on this website and in our free market bulletin, DEFRA have this morning issued a press release confirming qualifying English Dairy Farmers can apply for up to £10,000 to help assist with the financial impact of coronavirus on April and May deliveries.

To be absolutely clear this is nothing to do with when the deliveries made were actually paid into your bank accounts its about the average base price you were paid in the calendar month for April deliveries compared to that paid on February deliveries.

 

The calculation is based on the milk purchaser’s base price (for A, B and in one case C milk if that mechanism is used by your purchaser) with ALL adjustments for milk quality, volume collected, frequency of collection, seasonality NOT taken into account.

Note the £10,000 is not a per month maximum it’s a total maximum for April and May combined and it only applies to cows milk.

The new dairy response fund will open for applications on 18 June and the details are as provisionally outlined in yesterday’s bulletin with the first payments to flow from 6th July . The mechanism as to how it will be paid rests entirely with the RPA.

Without doubt some farmers will loose out and potentially by a fraction of a % meaning they don’t cross the 25% threshold. It’s hoped the aid will get to those most affected and to be brutally honest the package has come at a time when there are unprecedented pressure on a very stretched public purse so overall it’s a welcome fund but could be frustrating for some.

One area of concern, highlighted by RABDF today, is how farmers who dumped milk in early to mid April 2020 will be able to verify the volumes dumped because they won’t be recorded. However, given our notes indicate few if an farmer’s had to dump milk for more than three days maximum it should be easy to take a straight line average between the last delivery before dumping and the first delivery post dumping or a similar permutation.

Then there is the fact the dumping of the milk could mean some who would have qualified for the payment had they delivered the dumped milk could fall under the 25% rule post dumping.

(https://www.gov.uk/government/news/dairy-response-fund-set-to-open-for-applications)

 

 

Dairy Farmer Hardship applications open on 18th June(3rd June)

Following on from last nights news story on this website and in our free market bulletin, DEFRA have this morning issued a press release confirming qualifying English Dairy Farmers can apply for up to £10,000 to help assist with the financial impact of coronavirus on April and May deliveries.

Note the £10,000 is not a per month maximum it’s a total maximum for April and May combined.

The new dairy response fund will open for applications on 18 June and the details are as provisionally outlined in yesterdays bulletin with the first payments to flow from 6th July.

(https://www.gov.uk/government/news/dairy-response-fund-set-to-open-for-applications)

 

 

Hardship fund announcement due this week(2nd June)

 

In a draft email Ian has seen, the proposed details of the governments English Dairy Farmer Aid/Hardship fund are concluded and due to be announced this week by DEFRA.

 

Whilst the final announcement could be tweaked a bit, these are the nuts and bolts:

 

1)    All claims will be based against your February deliveries milk statement.

2)    To qualify for any payment, you must be able to demonstrate a minimum 25% reduction in income between the price you received in February to that paid in April. If you can’t show that, it’s a dead duck.

3)    You can claim for 70% of your loss. So, the calculation is very simple.

February milk price (ppl) minus April milk price (ppl) multiplied by 70% multiplied by your delivered volume in April = your claim but its capped at £10,000 maximum.

4)    You can only claim for May if you qualified for an April hardship payment. The same criteria and calculation will apply in May as in April.

5)    Applications from mid-June which closes at the end of August. Qualifying payments to farmers will be made from the RPA from July.

6)    Milk statements will be the minimum evidence required with each claim and will be verified.

 

DEFRA’s expectation is that the bulk of claims will come from suppliers to Freshways, County Milk, BV Dairies and will at most total 400 and could be a lot less. It’s certainly a lot less than the 2,000 farmers the NFU claimed were “suffering severe financial pressure”.

 

The Welsh Government are expected to follow with an almost identical scheme and process.

 

Questions – Will it be the standard litre price, purchasers base price or the total ppl the farmer received?

 

To be fair to DEFRA, its simple and based on ppl its transparent and really the only way to target aid based on loss of income to the worst affected farmers. The 70% and 25% figures will be debated once confirmed but they appear to be set in stone.

 

1.1ppl milk price reduction for suppliers to Joseph Heler Cheese – from 1st June(2nd June)

 

According to our records, this June price reduction is the only one we have heard of and a bit of a surprise coming from a cheese processor. Its looking very lonely and running against the tide.

 

First Milk to stand on until 1st August(2nd June)

 

This maintains members standard manufacturing litre price at 27.63ppl and based on a liquid standard litre at 26.75ppl.

 

Muller Direct to stand on until 1st July(2nd June)

 

This maintains producers liquid standard litre price at 25.25ppl plus 1ppl to 26.25ppl for farmers who qualify for the Muller Direct Premium.

 

Grahams Dairies Scotland (Liquid) to stand on until 1st July (2nd June)

 

This maintains producers standard liquid litre price at 24.5ppl (note no A & B split pricing).

 

Wensleydale Creamery (Cheese) to stand on until 1st July(2nd June)

 

This maintains producers standard manufacturing litre price at 27.25ppl and based on a liquid litre at 26.3ppl.

 

South Caernarfon Creameries (Cheese) to stand on until 1st August (2nd June)

This maintains a manufacturing standard of 27.28ppl based on a liquid standard litre price of 26.34ppl.  

Glanbia Cheese suppliers to stand on until 1st July (2nd June)

 

This maintains producers standard manufacturing litre price to 25ppl and based on a standard liquid litre 24.17ppl.

 

Pensworth (Liquid) to stand on until 1st July(2nd June)

 

This maintains producers liquid standard litre price at 23ppl for 70% of the A milk, the remaining 30% B price is based on skim and cream market returns, which for May deliveries averaged 16.1ppl.

 

Crediton Dairy (Liquid) to stand on until 1st August(2nd June)

 

This maintains producers liquid standard litre price at 27.5ppl.

 

Barbers (Cheese) to stand on until 1st August(2nd June)

 

This maintains producers manufacturing standard litre price of 27.79ppl and based on a liquid standard litre at 26.8ppl.

 

Belton (Cheese) to stand on until 1st August(2nd June)

 

This maintains producers manufacturing standard litre price of 27ppl and based on a liquid standard litre at 26.25ppl.

 

Saputo (AKA Dairy Crest) to stand on until 1st August(2nd June)

 

This maintains producers manufacturing standard litre price at 28.65ppl and based on a liquid standard litre 27.63ppl.

 

Wells Farm Dairy (Liquid) to stand on until 1st July(2nd June)

 

This maintains producer’s standard liquid litre A price at around 24.15ppl which is paid on 80% of supplies, the remainder is on a B price.

 

Stand on June milk price for almost all Arla Members(Posted on our website and Facebook page 20th May)

 

Arla’s member milk price for both conventional and organic will remain at the following levels until July 1st.

 

Standard liquid litre price 28.78ppl and based on a manufacturing standard litre price of 29.89ppl.

 

Organic standard liquid litre price at 37.48ppl and based on a manufacturing standard litre price of 38.93ppl.

 

In reality the June price has actually reduced by 1 Euro Cent however there is a 1 Euro Cent addition scheduled to start from June 1st as a climate check/change incentive.

 

There are less than 180 GB Arla farmers who have yet to sign up to the incentive and submit their details including Arlagarden Plus details hence the stand on price claim for the majority. Those 180 or so have until 2nd June to sign up and the likelihood is only a very small number will fail to cross that line and sign up so it will be 1 Euro Cent off and 1 Euro Cent on for almost everyone.

 

In the press release the key comment to note other than the price is The market outlook remains uncertain, with the likelihood of negative development. This must surely be Danish speak for we expect the milk price to ease in July.

 

1p and 2ppl milk price increases for Meadow Foods suppliers – from 1st June(2nd June)

 

An additional 2ppl will be paid from June 1st to Meadows Cumbrian and South Wales suppliers, taking their A standard liquid litre price to 24ppl and based on a manufacturing standard litre 24.25ppl.

 

An additional 1ppl will be paid from June 1st to Meadows North Wales, Staffordshire, Shropshire and Cheshire suppliers, taking their A standard liquid litre price to 26ppl and based on a manufacturing standard litre 26.38ppl.

 

1ppl Milk Price increase for suppliers to Dairy Partners (Mozerella) – from June 1st(2nd June)

 

Dairy Partners have reported small increases in demand resulting in a welcome 1ppl price increase from June 1st.

 

Dairy Partners took a slap when it confirmed it was purchasing cheap spot milk in April however, given the current grass growth, the firm has recognised that they urgently need to encourage loyal suppliers to pump out milk in the second half of 2020 which the processor along with other GB processors could desperately need.

 

1ppl milk price increase for some Freshways suppliers – from June 1st (2nd June)

 

In true Freshways style, the 1ppl will only be paid to those producers who signed the new Terms and Conditions, agreed to the 60:40 A and B price split and who haven’t tendered their notice.

 

There are a number of Freshways suppliers who plan to quit within weeks but as we understand it, they will receive the 1ppl increase on any milk delivered post June 1st.

 

1.6ppl milk price increase on the A litres price from Yew Tree Dairy – from June 1st(2nd June)

 

This results in a liquid standard litre price of 25.10ppl on the 63% A litres, the remainder is paid on a B price.

 

 

Freshways still in the relegation zone but with others paying less(2nd June)

 

Freshways April milk price based on 60% A and 40% B price split resulted in a disappointingly poor average price of 20 to 21ppl with the B litres paid out at a shade over 10ppl. On top of that, 40% of the total due was paid yesterday June 1st with farmers claiming no firm date has been announced as to when the remaining 60% will be paid, however it is due by 15th June at the latest!

 

However, others have remained under the radar with lower prices but unlike Freshways, they do not appear to have delayed farmer payments.

 

For example, Llaeth Cymraeg are rumoured to have paid under 15ppl in April – can any reader confidentially confirm this direct to Ian? (ianpotter@ipaquotas.co.uk)

 

Several County Milk producers, both local to County and further afield hit the keyboard a couple of weeks ago and subsequently provided Ian with evidence that they were paid a base price in April of only 15.5ppl with all receiving total average milk prices on all litres supplied of between 15.5ppl to 16.7ppl.

 

County’s interim on account payment for May deliveries stands at 17ppl and the final figure must surely top trump this. No wonder DEFRA have County Milk producers on their list of the most likely recipients of the hardship fund (see above).

 

Note some County suppliers locked into a fixed 26p price for part of their milk when it was available. – good move.

 

Muller cancel the request to reduce deliveries by 3%(2nd June)

 

Muller have cancelled their early April request for all producers (aligned, non-aligned and organic) to reduce supplies by 3% having reviewed volumes required against anticipated volumes.

 

Freshways/Capital Milk deal hits a nerve cord(2nd June)

 

According to two farmer suppliers, some of the Freshways suppliers in the south of England who left to supply Capital Milk are now supplying Freshways on a better price and deal than Freshways direct suppliers are currently on.

 

The farmers who moved to Capital saw their milk brokered to Muller but post Mullers decision to close its South East processing facility Capital have delivered the milk back to Freshways and fair do’s to Capital, the deal is allegedly better than the deal Freshways is giving its own suppliers under its new contract terms. This has not gone unnoticed and proved to be another irritant.

 

“The Only Way Is Up Baby” (2nd June)

 

With spot milk prices having risen to 27 – 28ppl and rising, the big question is when, in June not July, will those on a B price see it overtake their A price. It seems inevitable very soon and must shortly to be followed by A price increases from 1st July.

 

The positivity in the market is almost electric and buzzing with excitement. Futures markets rising -www.milkprices.com report 6 consecutive positive weeks with its future average back to the 16th March pre Covid lockdown level.

 

Cream up from lows of 75pkg to £1.30.

 

SMP prices recovering.


Spot milk reported at 28p today.

 

Come the 1st July, Ian’s expectation is for a tidal wave of milk price increases and not by fractions of a penny. All eyes will then turn to the milk buyers who have been paying the lowest prices and taking extended credit to check they do right by their producers and don’t try to pocket the increases for their own treasure chest. No longer will milk buyers be saying you can leave to go to another buyer when you want to with no notice required.

 

Markets are strengthening by the day and Ian’s prediction is for July, August and September farmgate price increases as this market bounces up with force.

 

The Yazz hit has lyrics went as follows:

 

“We’ve been broken down

to the lowest turn

bein’ on the bottom line

sure ain’t no fun.

Hold on it won’t be long”

 

For a few hundred producers, any July 1st increases can’t come quick enough.

 

Meadow are the latest dairy processor to diversify into plant based(2nd June)

 

Meadows diversification project has been rumoured for a few months and is now confirmed as operating from Meadows Chester HQ.

 

Processors across the globe are seizing the opportunity to provide non dairy based products in response to new consumer demand and Meadow have joined the movement. Some will see this as a betrayal, others will see it as a positive. Which would you rather have? A milk purchaser who is investing in diversification or one which is drowning in dirty water sticking to liquid milk?

 

Meadow will continue to have Dairy processing as its core business.

 

Today’s GDT was a stand on(2nd June)

 

Todays auction saw the average all products index rise by a mere 0.19%.

 

Notable movers were:

 

Butter down 4.4%

Cheddar down 5.3%

SMP down 0.5%

WMP up 2.1%

 

Stand on June milk price for almost all Arla Members - (20th May)

Arla’s member milk price for both conventional and organic will remain at the following levels until July 1st.

 

Standard liquid litre price 28.78ppl and based on a manufacturing standard litre price of 29.89ppl.

 

Organic standard liquid litre price at 37.48ppl and based on a manufacturing standard litre price of 38.93ppl.

 

In reality the June price has actually reduced by 1 Euro Cent however there is a 1 Euro Cent addition scheduled to start from June 1st as a climate check/change incentive.

 

There are less than 180 GB Arla farmers who have yet to sign up and submit their details including those for  Arlagarden Plus details . This is why its effectively a  stand on price claim for the majority of Arla members.. Those 180 or so have until 2nd June to sign up and the likelihood is only a very small number will fail to cross that line and sign up so it will be 1 Euro Cent off and 1 Euro Cent on for almost everyone.

 

In the press release the key comment to note other than the price is “The market outlook remains uncertain, with the likelihood of negative development”. This must surely be Danish speak for we expect the milk price to ease in July.

 

 

0.61ppl deferred milk price reduction for Marks & Spencers aligned suppliers(7th May)

 

The reduction has been delayed by 2 months until 1st June to assist the retailers 44 aligned farmers.

 

From June 1st the M&S standard liquid litre price will reduce to a very healthy 31.72ppl. (source – www.milkprices.com)

 

0.5ppl milk price reduction for Wensley Dale Creamery (Cheese) from May 1st(7th May)

 

This results in a manufacturing standard litre price of 27.25ppl and based on a liquid standard litre 26.3ppl.

 

0.5ppl milk price cut for suppliers to Dale Farm Cumbria from May 1st(7th May)

This results in a liquid standard litre price of 25.14ppl.

 

First Milk (Cheese) Stand on/hold its member milk price until at least 1st July(7th May)

 

This maintains members manufacturing standard litre milk price at 27.63ppl and based on a liquid standard litre 26.75ppl.

 

Belton Farm (cheese) to stand on/hold its producer price until at least 1st July (7th May)

This results in a manufacturing standard litre price of 27ppl and based on a liquid standard litre 26.25ppl.

 

0.43ppl milk price increase for the Co-ops aligned suppliers from May 1st(7th May)

 

This results in a liquid standard litre price of 29.82ppl (Source – www.milkprice.com)

 

0.8% reduction in GDT average(7th May)

 

Tuesday’s GDT auction saw the average all products index reduce by 0.8% to average US $2866 tonne.

 

Notable price movements were: 

 

Cheddar down 6.8% to average $4115 tonne.

Butter down 5.8%to average $3867 tonne.

SMP down 0.1% to average $2373 tonne.

WMP up 0.1% to average $2745 tonne.

 

Starbucks cut ties with Freshways  with immediate effect(7th May)

 

When Starbucks coffee shops re open it will no longer be using Freshways milk having this week decided it will source from Arla in future. The fact this change of milk supplier has taken place so suddenly is unheard of. Note some Starbucks franchisees will continue to use locally sourced milk. 

 

On the 22nd April this bulletin highlighted the eyebrow raising treatment of and questionable communication by Freshways to its loyal supplying farmers, and how for three consecutive weeks this had attracted the attention of numerous press, most notably The Daily Mail which savaged and discredited its owner Bali Nijjar in a way that no dairy company senior executive has been savaged before.

 

The bulletin commented The adverse press publicity has not gone unnoticed with several Freshways customers in food service, allegedly exploring how they can distance themselves from the processor’s constant negative press coverage. For sure, most retailers, food service and others are keen that throughout the Covid 19 period, processors treat all their loyal supplying farmers fairly and responsibly”. 

 

Freshways currently have the worst record of any UK dairy processor of how their numerous  changes  have seriously impacted on their  farmers finances  during Covid 19, whilst at the complete opposite end of the spectrum is Starbucks’ new partners Arla. It is no coincidence why the chain moved.

Freshways unprecedented treatment of farmers includes short notice to dump milk without payment, farmers pushed (some have said bullied) to sign new T & C’s or face a June price cut, a retrospective price cut, buying cheap spot milk, and extending payment terms to farmer suppliers , not to mention Freshways increasing the price elderly care homes pay for milk during the Covid pandemic . In addition Freshways directors have come in for criticism from their own farmers who are annoyed Freshways   continue to rack  up serious losses whilst dividends and payments appear to have filled its Directors pockets

This toxic cocktail was always going to come with repercussions. The instant loss of an estimated  10% of its volume to Starbucks is the first blow.

 

Freshways will probably claim that Starbucks moved because Arla offered cheaper milk, but that would be a laughable, pathetic and even rather desperate claim to make. Indeed, one contributory factor is believed to be that Freshways just delivered the milk to a minimum standard with no added standards or policy on animal welfare or sustainability. It’s no secret that some Freshways suppliers have previously trumpeted the simplicity of the contract, the milk testing frequency and the simple basic standards they have to achieve believing it is a positive. Starbucks is a global brand, as is Arla, and there is little doubt Starbucks would have been attracted to Arla’s calf policy, Arlagarden and 360 programs, plus more. The notion that only retailers are focused on brand protection is false because many food services match them for focus.

 

Freshways have significantly more problems than other processors and could do with a white knight or Harry Potter to quickly help the firm get out of these very choppy and troubled waters and to help improve its dreadful communications.

 

Sadly, Freshways farmers are not between a rock and a hard place they are between a rock and no place as Arla have been very public in keeping its recruitment door firmly bolted. If it was open then Arla would have every Freshways farmer in the land queuing up join it and it wouldn’t have a business left. At this moment in time few people would lament its passing.

 

£1 million milk promotion is launched(7th May)

 

AHDB Dairy UK and Government have joined forces and launched a 12 week milk marketing iniative to boost milk consumption and sales of dairy to UK consumers.

 

Its funded by AHDB, Dairy UK, DEFRA, Scottish Government, Welsh Government and the Northern Ireland Executive.

 

The promotion starts next week and the contributions are £500,000 from the four governments, £300,000 from Dairy UK’s processor members and £200,000 from farmer levy board AHDB. It will include TV advertising and looks very promising and fingers crossed it boosts sales and is backed and fully supported by all farmers and retailers. 

 

Hardship fund of up to £10,000 per dairy farm in England available(7th May)

 

The fund is to help English Dairy farmers who have been hit hardest by Coronavirus e.g. Freshways and Medina suppliers and a few others.

 

The cornerstone is for the money to go to those most in need of financial help with the target to cover up to 70% of their lost income in April and May. The lower 25% threshold to qualify and access the funding means producers must have lost a minimum of 25% of their income in April and May due to Covid19 disruptions.

 

There is no limit on the number of farmers who can receive the support aid or on the total funding available.

 

It will be interesting to see how many successfully apply for the aid and more importantly all eyes will be watching to make sure the existence of aid doesn’t trigger one or more processors to drop farmgate prices further or make other moves with a view to the money actually flowing into processors pockets effectively by passing the intended beneficiaries – the farmers. For sure, one or more processors could be tempted.

 

 

2ppl milk price reduction for Meadow Foods suppliers in Cumbria and South Wales - from 1st May (today) (1st May)

 

This reduces producers standard liquid litre price to 22ppl for their A volume milk.

 

1ppl milk price reduction for Meadow Foods suppliers in Cheshire, Shropshire, Staffordshire, Derbyshire and North Wales – from 1st May (today) (1st May)

 

This reduces producers standard liquid litre price to 25ppl for their A volume milk.

 

2ppl milk price reduction for Glanbia Cheese suppliers – from 1st May (today) (1st May)

 

This reduces producers standard manufacturing litre price to 25ppl and based on a standard liquid litre 24.17ppl.

 

Barbers (cheese) to stand for a 8th Consecutive month until at least 1st July(1st May)

 

This maintains Barbers standard manufacturing litre price at 27.79ppl and based on a standard liquid litre at 26.8ppl.

 

Saputo (AKA Dairy Crest Davidstow) stand on until at least 1st July(1st May)

 

This was agreed back in January and maintains the minimum standard manufacturing litre price at 28.65ppl and based on a standard liquid litre the minimum floor price 27.63ppl.

 

South Caernarfon Creameries (Cheese) to stand on until at least 1st July(1st May)

 

This maintains a manufacturing standard of 27.28ppl based on a standard litre price of 26.34ppl.

 

Crediton Dairy to Stand on until at least 1st July(1st May)

 

This maintains their standard liquid litre price at 27.5ppl.

 

Muller rescind the 1st May 1ppl price increase but stand on until at least 1st July(1st May)

 

Muller Direct farmers will not receive the agreed 1ppl 1st May price increase. This means it will be a stand on milk price at 25.25ppl plus 1ppl to 26.25ppl for farmers who qualify for the Muller Direct Premium and these prices will prevail until at least July 1st.

 

In early April when the increase was announced, the heading on our April 2nd bulletin read;

 

1ppl Price Rise for Muller Direct farmers is a big surprise” and Ian commented that “It is likely to be the only milk price increase for a long time and given the market conditions outlined below short-lived”.

 

Consequently, it’s no surprise to Ian and most others the bizarre increase has been rescinded, especially given the volatility in both butter and cream values during April as detailed below.

 

However, in a surprise press release the chairman of NFUS Milk Committee, Gary Mitchell stated that he was confused and that NFUS is seeking a full explanation for the decision from Muller. Perhaps the latest AHDB report will help the NFUS dairy team understand the market dynamics and clear up their confusion. (https://ahdb.org.uk/dairy/cream-income-to-a-liquid-processor).

 

Mullers retailer supplement reemerges for March deliveries(1st May)

 

Ian had completely forgotten this supplement was still in the wings but its back and for March deliveries from Muller Direct conventional contracted producers it will add a welcome 0.63ppl.

 

April’s volatile cream values summary(1st May)

 

According to AHDB Dairy, the April cream price was extremely volatile ranging from a low of around £700 tonne to a top of £1200 an incredible 70% band width of price variation and ended the month at around £900 tonne.

 

Note the value of cream to a liquid processor dropped by 29% between March and April worth 2.11ppl to a liquid processor and is down 39% compared to April 2019 a difference worth 3.22ppl.

 

AMPE drops a whopping 18% (-5.16ppl) in a month(1st May)

 

From the table at the top of this bulletin AHDB Dairy have confirmed that whilst MCVE continues to more or less hold its own AMPE has plummeted by 5.16ppl in just one month.

 

0.7ppl Milk Price reduction  for Paynes Dairies (Liquid) suppliers – from 1st May (1st May)

 

This reduces producers standard liquid litre price to 25.0ppl.

 

Freshways keep pushing producers towards the edge(1st May)

 

In a letter to producers dated Friday 24th April, the only interpretation can be that Freshways have confirmed they have been buying cheap spot milk in order to “balance week to week and day to day based on sales fluctuations”. This statement hasn’t been well received by some of the producers Freshways told at very short notice to dump milk without payment from their processor.

 

At the same time Freshways issued new terms and conditions to producers relating to a number of areas including the 60/40% split of A and B litres plus more, clearly having received legal advice that producers must sign up and agree to the new T’s & C’s.

 

Then comes the killer statement.

 

“We requested that famers confirm agreement to last week’s changes and therefore I have to say

that those of you who have not sent that conformation, we may have to look to reduce your A

litre price in June 2020 and this bulletin acts as notice for that June 2020 A litre price”

 

Most have translated this to mean sign and return or we will drop your A litre price. Guess what, most have signed blind on the basis they only have two options as in quit or take the medicine.

 

Grahams give notice to six unwanted producers(1st May)

 

Grahams Dairies in Scotland have given 12 months’ notice and the criteria for producer selection was:

 

1.     Attitude towards graham’s Dairy (AKA the awkward squad).

2.     Distance from Dairy.

3.     Milk Quality.

4.     Ability to forecast accurately.

 

It’s a huge blow for the six involved who are estimated to supply towards 12 million litres in total. It is understood that producers are free to leave as soon as they want to but its unlikely given their alternative options are very limited today if indeed they have any.

 

Dairy Partners stand on with its May milk price(1st May)

 

Along with Freshways, Dairy Partners confirmed to its producers it has been purchasing spot milk. The South Wales processor claims it needs the extra milk to increase factory output “utilising spare capacity with lower cost spot milk” rather than processing extra milk from its regular farmer suppliers. The declaration whilst up front and honest has not gone down well.

 

Subsequent to this, Dairy Partners have announced this week that they will hold producers May price at current levels which we don’t know how this fairs as a standard litre price, however April over supply volumes milk price will be paid at 19.57ppl.

 

Their hold is a PR plus because for a processor to admit to purchasing cheap spot milk and to then reduce ex farmgate milk prices would be a PR own goal.

 

0.9ppl (1 Euro Cent) decrease for Arla members from May 1st (24th April)

 

Arla are not immune from the worldwide effects of COVID19 but on the strength of this reduction, its product mix and ability to divert milk is greater than most. For sure this reduction wont help some of Arla’s processing competitors who appear desperate to drop farmgate prices asap and were praying for a 2ppl or more Arla price drop.

 

This results in a standard manufacturing litre price of 29.89ppl and based on a liquid standard litre 28.74ppl. The Arla member organic price has also decreased by 1 euro cent resulting in a standard manufacturing litre price of 38.93ppl and based on a liquid standard litre 37.43ppl (www.milkprices.com) 

 

According to www.milkprices.com the price change results in the following aligned standard liquid litre prices Tesco 30.16ppl, Morrisons (Grazing) 29.95ppl and Morrisons standard 29.72ppl.

 

2ppl milk price decrease for Pensworth Dairy suppliers from May 1st (24th April)

 

This reduces the liquid standard litre price to 22.5ppl and to 23ppl for producers who participate in Pensworths animal welfare standards.

 

Earlier in the month Pensworth temporarily extended its April farmer payment terms and in addition to this 2ppl cut it has now introduced A and B pricing. The May A price, based on 22.5ppl/23.0ppl (as above) will be paid on 70% of the milk supplied whilst the remaining 30% will be based on average market returns achieved in May for skim milk concentrate which recently has been trucked to Poland having been processed by Yew Tree.

 

Milk production down 2.4% (24th April)

 

According to the DEFRA figures total UK milk production in March was down 2.4% at 1.297 billion litres and compared to 2 years ago its down 3.2%.

 

Dairy Partners farmers furious they are buying cheap spot milk (24th April)

 

In a letter to its farmer suppliers, Dairy Partners (mozzarella cheese in South Wales) jaw dropping statement states

 

“Our revised budget plans are based on farm forecasted volumes and if no action is taken then we will not be able to take maximum opportunity for low cost milk, which in turn would impact all our Direct Supply producers. Please therefore ensure you keep to your own forecasted supply volume over the coming months.”

 

This can only be described as a real kick in the nuts , a processor requesting loyal farmers do not supply more milk than forecasted in order to allow the business to take advantage of cheap spot milk. Basically, restrict your deliveries to enable us to buy cheap spot milk and if you don’t, we will likely cut your milk price further. Note the last Dairy Partners price cut was 2ppl from April 1st.

 

Cutting production is easier said than done as we approach the spring peak and it has left some Dairy Partners farmers furious and understandably questioning whether the business has deeper rooted issues. Clearly it has surplus processing capacity, but wants to buy cheap spot milk from competitors/brokers.

 

The processor has not confirmed to its farmers at what price any surplus milk will be paid or the formula for calculating that price.

 

Freshways negative press continues and has registered with customers (24th April)

 

During the past three weeks, the Daily Mail has run three stories involving Freshways.

 

9th April highlighted the on-farm dumping of milk.

 

16th April headline was “As his firm (Freshways) forces family farms to pour milk down the drain meet fat cat who creamed of a fortune from our farmers.” (https://www.dailymail.co.uk/news/article-8223557/Balvinder-Nijjars-milk-firm-Freshways-cut-rates-40-cent-dairy-farmers-produce.html)

 

22nd April headline was “Fat cat who is milking our care homes during COVID-19 outbreak: First Balvinder Nijjar slashed the rates he pays dairy farmers, forcing them to pour their milk down the drain - now he's hiked charges for supplying food to nursing homes”  (https://www.dailymail.co.uk/news/article-8242685/The-fatcat-milking-care-homes.html)

 

The 22nd April article has brought tears to the eyes of some and had the blood boiling of others to learn that the company cut farmgate milk prices, extended payment terms of farmers, told them to dump milk and increased the price of milk to care homes during Covid19.

 

The adverse press publicity has not gone unnoticed with several Freshways customers in food service, allegedly exploring how they can distance themselves from the processor’s constant negative press coverage. For sure, most retailers, food service and others are keen that throughout the Covid 19 period, processors treat all their loyal supplying farmers fairly and responsibly. 

 

With many supplying farmers extremely unhappy with Freshways attitude and some of its customers looking towards pastures new it’s all suddenly going down hill at speed.

 

On top of this in a grocer magazine article, Bali Nijjar has confirmed Freshways are in full merger negotiations with Medina   and is quoted as saying “with everything that has happened recently, the speed of that merger process (with Medina) will only increase”.

 

Well the Competitions and Market Authority (CMA) will have the final say on that because its certainly on their radar and no doubt on the radar of The Daily Mail

 

As several concerned processors have indicated to Ian, Freshways have some excellent farmers who don’t know what to do and cant find an alternative home for their milk if they want to.

 

Countryfile interview for  Sunday prompts a recalculation  by NFU (24th April)

 

Last weeks declaration to DEFRA by the NFU that “2000 dairy farmers are suffering severe financial pressure” appears to have been recalculated ahead of Tom Heaps investigation into the Dairy Industry expected to be shown on Countryfile.

 

The figures were crunched and processors and their supplying farmers now categorised by the NFU into high, medium and low risk.

 

In the original version 1 high-risk category earlier this week the NFU had 5 processors, Freshways, Medina, Pensworth plus two other surprise inclusions neither of whom have told its farmers to dump milk or that they would not be able to pay farmers on time and as stated in their contract. The two were allegedly very forceful that their names were removed from the high risk list claiming that inclusion in that list presents reputational risk on which one was prepared to take action if necessary.

 

The accepted industry figure, which many knew all along, was that around 550 farmers predominantly supplying Freshways and Medina are in high risk and certainly suffering severe financial pressure. This was the accurate figure more than 10 days ago when the call to arms was made.

 

 

Statement made by Secretary of State for Environment and Rural Affairs, George Eustice, on Tuesday demonstrates he already has a grip on the true figures  (24th April)

 

An extract from his statement reads:-

Coronavirus presents unprecedented challenges to the businesses we rely on to provide essential services which keep people safe – including food supply, water and waste.

Many businesses in these sectors have benefited from Government schemes to support all businesses, including the Coronavirus Job Retention Scheme, Coronavirus Business Interruption Loan Scheme, and the Small Business Grant Scheme and support for the self-employed.

Beyond this, the Government has taken specific action to support the food, farming, water and waste sectors in the delivery of critical services.

 

Dairy: In particular, the dairy sector has felt a significant impact as a result of the coronavirus pandemic. Between 5 and 10 per cent of total milk production goes to the food service trade and there is therefore a small proportion of milk production that currently has no home. The vast majority of Britain's 10,000 dairy farmers continue to supply their contracts at the usual price and larger processors have been largely unaffected by the market disruption because of their scale and diversified nature. In order to support the affected farmers, on Friday we announced that we will set aside some elements of competition law to make it easier for processors to come together and voluntarily work out how to ease production down in order to create the space in the market for that milk that currently has no home and to support a recovery in the spot price. We have asked the Agriculture and Horticulture Development Board (which supports the interests of dairy farmers and the wider farming industry) and Dairy UK (which represents the processors) to coordinate a proposal and discussions are already underway.

 

RABDF call for all UK COVID19 affected dairy farmers to complete their survey (24th April)

 

The Royal Association of Dairy Farmers is calling on all Covid19 affected dairy farmers to complete its survey to enable it to collate the data and submit to government.

 

For further details, click the link: https://www.rabdf.co.uk/latest-news/2020/4/20/calls-for-dairy-farmers-across-the-uk-to-submit-daily-accounts-of-losses

 

 

 

 

 

0.9ppl (1 Euro Cent) decrease for Arla members from May 1st (23rd April 2020)

 

Arla are not immune from the worldwide effects of COVID19 but on the strength of this reduction, its product mix and ability to divert milk is greater than most.

 

This results in a standard manufacturing litre price of 29.89ppl and based on a liquid standard litre 28.74ppl. The Arla member organic price has also decreased by 1 euro cent resulting in a standard manufacturing litre price of 38.93ppl and based on a liquid standard litre 37.43ppl (www.milkprices.com) 

 

 

 

 

 

 

 

5ppl milk price reduction in only 12 days for Medina suppliers (17th April 2020)

 

Only 12 days ago Medina suppliers were given notice of a 2ppl milk price cut from May 1st.

 

Now a further 3ppl reduction is coming, meaning a whopping 5ppl on May 1st taking producers liquid standard litre price to 20.75ppl.

 

If that wasn’t enough pain, payments to farmers will be delayed by 21 days with the next payment to be made on the 4th May.

 

In the letter dated 15th April, Medina claim spot milk price is 5ppl that day and cream is trading at 80p kg which is certainly not correct. Spot milk on Wednesday and today was checked by me with three traders and was 15 to 16p and cream was 90p kg. I accept that 10 days ago it was 5p and 80p, but that was very short lived and not a valid reason for Medina to use.  The same figures were quoted by Medina’s Arfaiz yesterday to its farmer group and sadly no one challenged them.

 

This industry appears to be very selective and inaccurate with the data it uses (see below).

 

Whilst the one positive is Medina will collect all of the milk, there is no doubt the 3-week payment deferral will send shivers down the spine of most, if not all Medina suppliers.

 

Freshways announce a 13-day backdated price cut and delayed payment terms   (17th April 2020)

 

 

In a letter dated 11th April, the managing director of Freshways, Bali Nijjar, notified suppliers of changes backdated to 29th March, meaning a minimum 13 days retrospective notice.

 

The changes included producers A price to be restricted to 60% of their current A volume/quota and from 29th March this will be paid at a liquid standard litre price of 24ppl (www.milkprices.com)

 

For milk delivered in March the Freshways payment terms have been extended with payment of 50% of the money owed delayed until 30th April and the remaining 50% will not be paid until 15th May.

 

The price mechanism, if any, for the remaining 40% is unknown and appears to be at the discretion of Freshways.

 

Like Medina suppliers (see above), the deferred payment terms will be a major worry to all.

 

Yew Tree Dairies solution is more transparent    (17th April 2020)

 

 

In our 8th April bulletin, we reported that Yew Tree Dairies had temporarily reduced their A price by 2ppl to 23.5ppl from May 1st, having notified producers in advance on the 6th April in what could only be viewed as a very upfront detailed letter of the situation the Woodcock family face. Supplying farmers should value such transparency.

 

The A volume litres to be paid at the standard price was reduced to 54% of each farms original volume from 15th April.

 

The remaining milk amounting to 46% of the A volume will be paid according to market returns for skim milk powder, skim milk concentrate and cream. All litres above the total A volume continue to be paid at the fcstonemilkprices.com UKMFE price currently 21.41ppl see below.

 

All Yew Tree payments to farmers will be on time as usual.

 

Market Update  (17th April 2020)

 

 

10 days ago, spot milk was 5ppl or less and some farmers were told to dump full days collections with no contribution from their processor. Today, there is no one dumping their daily production and spot prices are 15/16p and cream has risen to 90p kg.

 

In an article (www.milkprices.com) earlier this week reported gains in the futures markets including the average price of butter up for the first time in 5 weeks (+16 euros tonne), SMP up 53 euros a tonne from a 4 week down turn.

 

The result is a net UK MFE of 21.41ppl. Nothing to trumpet about but it’s a U turn in the right direction and for the trade distress milk could be behind us as several believe we have already passed the dark low point. Note that does not mean further farmgate milk price reductions will not happen because they will.

The COVID19 effects on the fresh UK dairy market are changing almost daily and it’s by no means all downside.

 

 

Paynes Dairies update suppliers on market conditions  (17th April 2020)

 

 

Charlie Payne wrote to his producers a week ago to inform them of the current market his business faces and offering to update them all weekly with what is a very fast changing market. This should minimise any sudden surprises especially if the updates are comprehensive and is a smart PR move.

 

Grahams take positive action to find new markets  (17th April 2020)

 

 

Scottish fresh milk family business, Grahams, have increased both the areas they cover with doorstep deliveries as well as the range of products they will deliver to doorsteps.

 

Grahams introduced a doorstep glass bottle service last year which has proved to be a success and attracted a significant number of new regular customers.

 

In a press release Grahams, unlike some, acknowledged its supplying farmers.

 

We are as grateful as ever for the hard work, positivity and determination of our farmers, suppliers and everyone at Graham’s, they are all very much appreciated”.

 

Two loud calls to government to provide financial support to dairy  (17th April 2020)

 

 

1)    Today a letter from 13 managing directors/CEOs of 13 GB dairy processors has been sent to David Kennedy, director general for food and farming at DEFRA, which originated from Meadow Foods, CEO Mark Chantler.

 

The letter references the conference call on Wednesday and refers to DEFRA’s request for accurate and credible supportive data, presumably to back up jaw dropping claims made by the NFU and others (see below).

 

The letter proposes grants of up to £25,000 or 10ppl be paid to “the most acutely affected farmers” with farmers applying based on their farm income difference in January 2020 compared to the income in April, May and June. Total Maximum cap expected to be £50 million.

 

Then comes yet another example of poor homework research by the authors with the statement there are approximately 8,500 dairy farmers in the UK. There are 8,454 in England and Wales and circa 12,000 in the UK. This industry needs to do its numbers homework.

 

The letter claims to represent over 2,000 farmer suppliers and on a quick look down the list of those involved, we assume this number includes Medina, who are not signatories to the letter but presumably part of the Freshways Group. Interestingly, it includes Helers and Long Clawson, both cheese makers alongside milk brokers and middle ground liquid processors, which is a bit of a surprise.

 

2)    At an industry conference call with DEFRA on Wednesday, it appears DEFRA were unimpressed with the lack of detail provided by the NFU’s and others and they certainly didn’t take too kindly to what were interpreted as veiled threats along the lines if the Treasury don’t come up with a financial package by Friday (today) we will go to the press highlighting the necessity for farmers to cull healthy cows, well DEFRA have not come up with a package yet.

 

Having seen the letter above, it is perhaps this group of 13 who provided the information to the NFU Dairy Board claiming “2000 dairy farmers are suffering severe financial pressure”.

 

That number is a big surprise and way too high. It was described as a back of the fag packet calculation from an organisation who should be better qualified. One insider claimed the 2000 number includes Meadow Foods but to date, Meadow have not announced any price cuts connected to COVID19, but its no secret with the added problem of circa an extra 150 million litres of ex Arla milk Meadow have to sell from April 1st, they will be under serious pressure and its farmers will soon be dragged in.

 

It is a fact that lots of businesses have problems as a result of COVID19 and some will be knocking on the Treasury’s door. When you knock on that door, its essential you go armed with all the relevant facts to win your argument. Note the fishing industry has today been granted a £10m package available to around 1,000 boats for up to 3 months, but they went in armed with a book of accurate up to date data which helped them succeed.

 

The big question the Treasury will have to address is how any grant or payment to farmers will be used because the danger is that one or more processors might see it as a reason to further cut farmgate milk prices.

Some careful thinking and scrutiny will be needed to avoid any smart jiggery pokery which could mean the main beneficiary of any bail out simply passes to the odd bandit or desperate processor. 

 

The USA’s plan for COVID19 dairy crisis   (17th April 2020)

 

 

US estimates claim current milk supply exceeds demand by a whopping 10%.

 

In a plan put to government, which is at present, a proposal, the nuts and bolts are basically as follows:

 

1.     All producers voluntarily cut milk production by 10% using March 2020 as a baseline.

2.     Producers to be paid for the dumped milk until at least June.

3.     A working capital loan facility available to processors.

4.     Large purchases of dairy products to be distributed to food banks. This latter point has evidently received traction as part of a US government plan to buy milk, meat and a range of agricultural products to be used by food banks or in International Aid. It’s part of a phase 1 $15.5 billion (£12.5 billion) package.

 

It’s a very ambitious plan to which the outcome is it be confirmed.

 

 

 

 

 

Muller Farmers requested to immediately reduce milk supply by 3% (8th April 2020)

In a letter today to all its producers including retailer aligned, Muller Direct and Muller Organic the firm has requested each farmer reduces deliveries with immediate effect by a minimum of 3% and this to continue until the end of May 2020.

 

The letter states that this means every farmer reducing daily deliveries by a minimum 3% based on a seven-day average.

 

This is Muller’s approach to balancing its milk intake and force farmers to take individual action. It will not take long for Muller to establish whether all farmers are playing their part and if not, what further action the company will need to take. 

 

This will be an interesting challenge, if only a few farmers fail to play their part and whether Muller take targeted action to the offending farmers to bring them into line or step up the requirement to cut production on a collective basis thereby effecting all farmers.

 

0.5ppl Price Rise for Waitrose (Muller) aligned suppliers from April 1st – Producer Notified (8th April 2020)
This results in a liquid standard litre price of 32.35ppl.
 
0.43ppl Price Rise for Co-Op (Muller) aligned suppliers from May 1st (8th April 2020)
This results in a liquid standard litre price of 29.82ppl.
 
 
0.33ppl Price Rise for Tesco (TSDG) aligned suppliers from May 1st – Producer Notified (8th April 2020)
This results in a liquid standard litre price of 31.51ppl (Muller) and 31.26ppl (Arla) and is the result of the quarterly review of the Tesco cost tracker.
 

Belton Farm (cheese) to stand on/hold its producer price until at least 1st June (8th April 2020)
This results in a manufacturing standard litre price of 27ppl and based on a liquid standard litre 26.25ppl.
 
2ppl milk price cut for Yew Tree Dairy suppliers plus they will only be paid full price for 54%  of their deliveries. (8th April 2020)
In a letter to farmers dated 6th April Yew Tree announced a 2ppl 1st May price cut in addition to an A and B pricing schedule which means from 15th April the A price ( the one to be reduced by 2ppl from May 1st ) will only be paid on 54% of deliveries with the remaining 46% paid at a B price based on the market returns from a combination of SMP, cream and skim concentrate. On today's market that price would be very indigestible indeed.

That’s a blow and a bitter pill to swallow but that’s how it is. Oh, and the letter closes stating suppliers should refrain from calling unless absolutely necessary.
 
3ppl Milk Price Cut for suppliers to Lancashire farm (Pakeeza) backdated to April 1st (8th April 2020)
This will affect around 40 farmer suppliers. The milk predominantly goes into yoghurt. Lancashire farm have lost around a third of their sales with the resulting surplus milk having to find a new home.
 
2ppl Price Cut as Medina follow Freshways with delayed payments to farmers (8th April 2020)
Medina have announced a 2ppl price reduction from 1st May. This takes producers standard liquid litre price to an average of 23.75ppl according towww.milkprices.com
In addition, from April 13th payments to farmer suppliers will be delayed by two weeks. All down to COVID-19 and the loss of food service business, but once again it’s a double blow to farmer suppliers and a mirror image of the Freshways announcement.
 
Spot Milk Price – if you are a bidder, you are a buyer (8th April 2020)
The spot milk price fell from 15p last Thursday to 7ppl on Sunday and 5ppl yesterday and now its worthless and cheaper to dump the milk unless you are very lucky. Any bidders will be buyers. Note the spot price is collected and delivered to factory at the cost to the selling processor, which results in 2 to 3ppl deduction from the 5p sale price.
There simply is nowhere for this milk to go and be processed in GB.
 
Latest update on the dramatic downturn in Dairy (8th April 2020)
It’s those processors supplying the food service, schools, universities, restaurants, coffee shops, pubs etc who have seen their order books battered and cash flow predictions torpedoed.


The picture is changing daily and at an unbelievable speed, for example in the past 4 days cream values have dropped by 20p kg to between 80 to 85p a deficit of almost 2ppl to a processor.


Yew Tree Dairy have reported sales of Polybottle cream for them have dropped by a whopping 95%!!!
Numerous organisations have issued press releases basically calling for government support/financial aid to assist badly affected dairy farmers, in what is a rapidly deteriorating situation.


The common denominator is a request for government to put its hands in its pockets asap. The Royal Association of British Dairy Farmers (RABDF) estimate around 300 dairy farmers producing around 1 million litres a day, should be eligible for its proposed short-term package. This to be targeted at those who are experiencing significant drops in their ex farmgate milk price and/or having to dispose of unwanted milk their purchaser will or cannot collect from their farm.
The RABDF’s proposal suggests farmers be paid up to a standard litre milk price of 25ppl, with farmers paid by Government via their monthly milk cheque.


One question Ian has is whether the public will view dairy farmers as a priority case for financial support? For sure ahead of them in the queue as far as DEFRA are concerned will be horticulture.  


 It won’t be easy to handle the PR supporting why Government are justified in paying farmers to dump milk at a time food banks are desperately needed, and some households are struggling to feed themselves. Ian’s view is it’s a dangerous area to go down and should be a last resort.
 
Current Solutions as collated by Ian (8th April 2020)
The goal is to remove the surplus distressed milk from the market immediately. Please remember this milk is sloshing around as a direct result of the measures taken by government on a market which is unable to adjust at the speed the chaos has snook up on us.  


Ian is not suggesting the government was wrong in making the decision it did to close down the Food Service sector but it has to be pointed out that move has resulted in the current chaos.


So below is a selection of the solutions on offer. You may have others in which case email Ian
 
1) Pay affected farmers to cull cows as part of a temporary out goers’ scheme, assuming the meat plants can take the extra tonnage. Ian has briefly looked into this and capacity at slaughterhouses is more or less a given with the option to work extra shifts and Saturdays if required. That leaves one problem, what to do with the cow beef and where to sell it with no export market and prices already well back.
 
2) Fast forward the planned BPS golden handshake/out goers’ scheme and/or introduce a voluntary outgoes scheme for those worst affected as suggested by Kite consultancy.
 
3) Leave it to individual farmers to claim any milk dumping losses from their farm insurers. Note the NFU Mutual's policy only covers farmers for a maximum 7 days of dumped milk and some policies don’t cover any such claims.
 
4)   Implement market support measures including government to buy the distress milk and pay farmers to dump it at 15p to 25p and / or place it into AD plants
 
5) Intervention and/or private storage aid until normality returns.  Intervention is open now and available to the UK and would take butter and SMP at a price equivalent to 19ppl but is subject to strict limits on tonnage accepted. The problem with this is that it simply delays recovery only for the problem to be faced at a later date.
 
6) Pay the full price for a percentage of the milk from the genuinely and seriously affected processors based on 2019 production figures. i.e. the excess or so-called B litres to be disposed of. This would be a processor set figure. This is Ian’s favourite at the moment but in preferring this option he assumes the A price will remain sensible and reflect the processors normal non-food service business milk price he can pay.

 

7) Processors to continue to extend payment terms alongside price drops and instructions to dump milk on farm. This is non-tenable. A disaster.


8) Put surplus milk into cheddar. This will give the cheddar market a hangover and its paddling its own canoe successfully at the moment and doesn't need to be dragged into this mess.

9) Farmers agree to voluntarily cut production by x%, or are told to do so.  This will affect production and milk supply later in the year and we all know how easy it would be too get three neighbouring farmers to agree let alone thousands so it has to be compulsory and processor led.

 

10) Reduce cost, maintain or increase margin and cut milk output by maximising milk from grass for those who don’t already do so.
 
The issue with most of these options is that the problem is here today and most of these solutions will simply take too long to implement. Yes, individually and collectively they are likely to stabilise the farmgate milk price and reduce the disruption. All the distress milk needs to be taken out of the system but how quick can it be done? The last thing we want is for this milk to drag down the whole market and destabilise prices which is the direction it is heading today.


On a daily basis processor in the so-called middle ground and smaller operators and not collecting milk from farms, dropping farm gate milk prices and/or introducing A and B pricing at short notice.
 
It’s clear from Ian’s discussions that some processors are trusted by their farmers more than others and some aren't trusted at all. Any scheme or solution involving any financial package will need to be backed up with good due diligence and evidence that the processor has lost orders to COVID-19. 


If a processor is up front, honest and transparent with their producers I suspect most will understand, however the track record in this department is not good in some cases.
 
The shortage of liquid milk in retail stores is down to consumers erratic and unpredictable buying patterns. At processor level, one or two processors involved appear to be genuinely concerned and actively considering the fairest thing to do for all involved e.g. farmer suppliers and the processors is to move to weekly farmgate milk pricing. 

 
Finally, we are not alone! GB milk producers are not the only ones told to dump milk due to a sudden drop in demand.  In the US it’s a mirror image with claims that a staggering 10% of current US farmgate milk output has no home or market.

 

A friendly warning to a handful of vocal farmers. (8th April 2020)

Understandably, there are a number of farmers who are extremely unhappy with their milk purchaser and certainly one or two milk purchasers appear to be in the farmers firing line.

 

Ian wishes to warn some farmers against crossing the line from being firm and requesting transparency to becoming a nuisance, particularly if they are geographically some distance from their milk purchaser and/or a farmer with a history of quality and farm assurance issues.

 

There is little doubt that one or two milk purchasers are seeking any opportunity to reduce their milk intake and dispense with unwanted farmers who are unlikely to find an alternative home for their milk. Be firm, but be careful.

 

 

 

1ppl Price Rise for Muller Direct Farmers is a big surprise (2nd April 2020)

This won’t be a popular comment, but Muller’s 1ppl price increase from May 1st is undoubtably a big surprise, so much Ian had to read the Muller 31st March release twice!

 

It is likely to be the only milk price increase for a long time and given the market conditions outlined below short lived.

 

However, in the release, Muller’s Operations Director, Rob Hutchinson comments “We have a resilient supply chain and are well placed to deal with it “. The current market turmoil will put to the test this bold claim.

The liquid standard litre price for Muller Direct nonaligned farmers who fulfil the conditions to gain the 1ppl Muller Direct Premium will be 27.25ppl. For those who don’t qualify for the premium, the standard litre price will be 26.25ppl.

 

First Milk (Cheese) Stand on/hold its member milk price until at least 1st June (2nd April 2020)

 

This is an excellent result for which First Milk and its partner in cheese, Ornua (formerly Adams) should be applauded, particularly for the stability it delivers.  

This maintains members manufacturing standard litre milk price at 27.63ppl and based on a liquid standard litre 26.75ppl.

 

Barbers (cheese) to stand for a 7th Consecutive month until at least 1st June (2nd April 2020)

 

This maintains Barbers standard manufacturing litre price at 27.79ppl and based on a standard liquid litre at 26.8ppl.

 

Saputo (AKA Dairy Crest Davidstow) stand on until at least 1st July (2nd April 2020)

 

This was agreed back in January and maintains the minimum standard manufacturing litre price at 28.7ppl and based on a standard liquid litre the minimum floor price 27.62ppl. Once again, the stability it delivers should be applauded by all involved in what was forward thinking.

 

Lactalis (AKA Caledonia & The Fresh Milk Company) to stand on until 1s July (2nd April 2020)

 

Lactalis will hold its supplier milk price for the next quarter  until 1st  July 2020 at a minimum floor at 27.61ppl based on a manufacturing standard litre and 26.5ppl based on a liquid standard litre assuming the market remains normal and there are no seismic up or down movements.

 

Crediton Dairy to Stand on for May (2nd April 2020)

 

This maintains the standard liquid litre price at 27.5ppl.

 

South Caernarfon Creameries (Cheese) to stand until at least June 1st (2nd April 2020)

 

This maintains a manufacturing standard of 27.28ppl based on a standard litre price of 26.34ppl.

 

Glanbia (cheese) stand on\hold its price until at least May 1st (2nd April 2020)

 

This maintains a manufacturing standard litre price at 27ppl and based on a liquid standard litre 26.1ppl.

 

 Wensleydale Creamery (Cheese) to stand on until at least May 1st (2nd April 2020)

 

This maintains a manufacturing standard of 27.75ppl and a liquid standard litre of 26.8ppl.

 

Pensworth Dairy (Liquid) to stand on until 1st May (2nd April 2020)

This maintains their liquid standard litre price at 25ppl for those producers who participate in Pensworth’s new animal welfare standards for others who do not qualify it will be 24.5ppl

Pensworth have written to producers outlining how Covid19 has battered their budgets especially given their customer base amongst others includes 230 hospitals, 1700 care homes as well as 100,000 plus doorstep customers many of whom are elderly and self-isolating.

Pensworth have had to confirm extended payment terms for 30 days at 10-day payment intervals with a 25% part payment to farmers with the remaining 75% to follow once funds are received.

 

This will run from 30th March until the 30th April and from May 1st Pensworth have confirmed all farmer payments will be made in full. Certainly, the payment delay is significantly more farmer friendly and considerate than the Freshways terms even if it is unwelcome and unpopular. The hold for April milk price is a big thumbs up.

 

 

 

 

Wells Farm Dairy Stand on but under constant review – Producer Notified (2nd April 2020)

 

In a letter to producers dated 23rd March, Wells have confirmed they have seen the business hit hard consequently have farmgate milk prices under constant review on almost a daily basis.

 

0.5ppl Milk Price decrease for Paynes Dairies (Liquid) suppliers – from 1st of April (2nd April 2020)

This reduces producers standard liquid litre price to 25.7ppl.

 

2.25ppl Milk Price reduction for Pattemores (Liquid) suppliers – from May 1st (2nd April 2020)

This reduces producers standard liquid litre price to 24ppl.

 

2ppl Milk Price reduction for Dairy Partners Suppliers (Mozzarella Cheese, Wales) – from April 1st Producer Notified (2nd April 2020)

Standard litre price unknown but will be under 25ppl.

 

Grahams skimming and disposing surplus milk and a 1ppl price cut – from April 10th (2nd April 2020)

Grahams dairy in Scotland yesterday informed its supplying farmers that it has been forced to skim and dispose of milk at both its Bridge of Allan and Nairn processing facilities. In addition, they have alerted farmers to the fact “and we have significant concern around our ability to pick up ex-farm milk in the coming days. We are reviewing this position by tomorrow afternoon.”  

 

Grahams have also closed both their Glenfield and Crieff operations. Glenfield for 5 days and Crieff for up to 3 months.

 

The 10th April 1ppl price cut reduces producer’s liquid standard litre milk price to 24.5pl, with the clear inference that given the current UK dairy market more tough decisions cannot be ruled out.

 

Dairy prices in freefall with spot milk at 15ppl plentiful and falling like a stone (2nd April 2020) 

In this bulletin dated 13th March, Ian stated –

 

Coronavirus is causing a melt down and if the government introduces restrictions the dairy trade is buckling for a very rough ride with some expecting spot milk to be plentiful and quickly down to circa 20p as orders are reduced or cancelled on mass.

 

Well it has spectacularly crashed to 15p and falling. There is suddenly oceans of surplus milk desperately trying to find a home. Today some milk has gone into AD plants, three processors have dumped milk and two medium/small processors have informed farmers that they can guarantee to collect all the milk this week but can’t guarantee to collect it all over the weekend and next week and to be prepared to dump it on the farm. Note there are Environmental Agency rules in circulation for the spreading of milk, if anyone would like a copy email sally@ipaquotas.co.uk

One processor claims to have been offered milk FOC for the cost of transporting it!

 

The milk market has all changed very quickly. The panic buying of dairy products with retailers restricting milk purchases has reversed as demand plummeted. Retailers were screaming for milk 10 days ago and now it has died as quick as it started. The stock piling has stopped and consumers freezers are full of milk and dairy products. Whilst there is an expectation demand will start to increase by retailers there is a definite need for speed. Processors across GB are struggling to manage the huge fluctuations in retailers demand.

 

To compound matters, the food service, restaurants, pubs, hospitality businesses have been rushing to offload unwanted stock and cancelling orders. Even within retailer stores remember all the dairy products sold over the deli counters and coffee shops that have also closed whilst stores have remained open. This counts as Food Service business and not retail

 

AHDB have issued a release estimating the UK food service sector accounts for 8 million litres of milk and this will be offset by increased demand from retailers which equates to a 10% increase. That 8 million litre figure is the source of much controversy and debate and nowhere near accurate and should be closer to 20 million litres and for sure retail sales will not offset this figure as suggested by AHDB. In fact, one set of figures claims retail sales are now around 12% below what would be expected at this time of year.

 

Processors also have the challenge of keeping the show on the road with tanker drivers and other key workers having to self-isolate.

 

What does this all mean for milk prices? (2nd April 2020) 

With cream prices having dropped from 1.35 to £1 in under three weeks, liquid processors are under pressure.

It’s serious, and don’t shoot the messenger but unless a processor has connections with Ian’s relation, Harry Potter, holding liquid non-aligned farmgate prices at current levels will be close to mission impossible as more milk is forced into commodity markets and with our driers at full stretch distress milk has returned big time.

 

Also remember its still cold and when things do warm up, the quantities of milk “trying” to find a home will escalate and be serious.

 

Woodcocks/Yew Tree Dairy’s facility is already rammed full to capacity.  There must soon   be calls for some sort of intervention type buying / private storage to open asap.

 

Very quickly farmers will value the security of getting all their milk lifted and paid for. The latter will be a real worry for those who have suddenly gone from a maximum 7 weeks milk outstanding to almost 12  weeks by May under new forced payment arrangements.

 

This will have very serious long-term consequences and it is starting to feel very painful and time to buckle up and sadly for some it won’t be a case of can I find a new milk purchaser, more can I find a buyer for my cows. 

 

Processors cash flow budgets have been blown up and whilst some are clearly very worried over long term farm supply base , they either take mitigation steps in conjunction with their farmers or risk shutting up shop. Most liquid processors Ian has spoken to are having to ditch the code one-month price movement notice period and review the situation almost on a daily basis with several stating “I am working to avoid the Freshways approach”. For sure, sadly some businesses will be casualties.

 

Arla’s member April Milk Price to remain at 30.79ppl (25th March 2020)

Arla have announced a stand on April 1st member milk price on both conventional and organic supplies with a small 0.15ppl quarterly currency adjustment.

 

The resulting manufacturing standard litre price is 30.79ppl (39.83ppl organic) and based on a liquid standard litre 29.61ppl (38.3ppl organic).

 

 

 

2ppl second bombshell price cut from Meadow Foods (25th March 2020)

A group of Meadow Foods suppliers in South Wales have been informed that they join Meadows Cumbrian farmers in taking a 2ppl price cut from 1st April.

 

The resulting liquid standard litre price is 24ppl whilst those Meadow Suppliers closer to its Chester HQ remain on 26ppl.

 

A number of Meadow farmers hit with the reduction feel that they have been unfairly victimised and have concluded that whilst Meadow want to hold them to 12 months’ notice, the reality is they are no longer wanted and need to either find new homes for their milk or exit the industry. Its brutal, but accurate.

 

One affected farmer summarised their position and thoughts as “It was a very heated meeting with Meadow Foods. We can’t survive at 24ppl and Meadow have let us down!”.

 

2ppl bombshell price cut for Freshways suppliers (25th March 2020)

In my 13th March edition I wrote:

 

Coronavirus is causing a melt down and if the government introduces restrictions the dairy trade is buckling for a very rough ride with some expecting spot milk to be plentiful and quickly down to circa 20p as orders are reduced or cancelled on mass.

 

The problem is primarily in London where the food service industry is gradually grinding to almost a shut down and if schools and universities close it will be close to meltdown especially in coffee shops (people working from home won’t visit coffee shops) and restaurants.

 

Talk of challenges within the enlarged Freshways Medina combined business have been doing the rounds in recent weeks and the supplying farmers have now had to swallow a very bitter pill in the form of an eye watering 2ppl 29th March short notice price. If that wasn’t enough, Freshways are also deferring paying their farmers for milk supplied by one extra month. So, March deliveries will be paid for on May 15th rather than April 15th.

 

In a letter to producers, Freshways suggested there were four options available and two of those options have been quickly executed and put extreme pressure on farmers viz, a 2ppl price drop coupled with extended payment terms.

 

Freshways are very focussed on London, which has seen almost all food service customers (coffee shops, hotels, restaurants etc.) put the shutters up. It’s a section of the Freshways business which accounts for more than 40% of their product outlets.

 

This is in complete contrast to many other liquid processors who are under extreme pressure to meet the additional demand spike for milk from stay at home consumers, many of whom have been panic buying.

 

Several Freshways farmers do not accept this is force majeure and have been advised it is a breach of contract and their push is how quickly, without notice, they can get off the Freshways bus. 

 

Freshways 29th March liquid standard litre price will reduce to 24ppl.

 

Chinese demand for Dairy is on the up (25th March 2020)

 

According to the latest Rabobank analysis, Chinese demand for imported dairy products is “bouncing back” as new cases and deaths continue to decline daily. Yesterday reduced to 4, and new confirmed cases down to 47.

 

Rabobank predict Chinese consumers dairy buying habits will return to “normal” in the second half of this year. However, the seismic drop in global tourism has been a huge blow to Asia’s food service industry which is unlikely to recover in 2020 and will leave the global dairy industry with a severe hangover.

 

First Milks First 4 Milk Pledge(25th March 2020)

First Milk is the latest milk processor to set its own assurance standards covering people, animals and the planet.

 

Areas covered include a reduction in antibiotic use and a minimum grazing of 120 days and 6 hours each day for each animal as well as a guarantee that no healthy animal (including any calves) will be on farm euthanized.

 

First Milk have been working on the pledge for several months having recognised consumers key concerns and the direction of travel the dairy industry needs to take.

 

Ian will be commenting on this and other standards in his next Dairy Farmer Article.

 

For a brief summary of the impact of Coronavirus (COVID-19) on dairy markets, click on the AHDB link below (25th March 2020)

https://ahdb.org.uk/news/coronavirus-impact-on-dairy-and-livestock-markets?_cldee=aWFucG90dGVyQGlwYXF1b3Rhcy5jby51aw%3d%3d&recipientid=contact-7c56b5380748e81180cd005056b864bf-8673600defa04a9c95e584e475c13f79&esid=3e97f0ef-f369-ea11-a811-000d3a86d545 

 

 

2ppl Bombshell price drop from Meadow Foods (13th March 2020)

Cumbrian suppliers to Meadow Foods were delivered a huge blow late last week with the announcement that Meadow were to cut their milk price by 2ppl from April 1st resulting in a relegation/bottom of the table standard litre price of 24ppl.

 

Umpteen furious Meadow farmers emailed Ian having been informed that Meadow have had to make the cut due to reduced demand by Arla of 150 Million litres which means Meadow were brokering 30% of their milk (Circa 500 Million Litres) to Arla. Meadow will continue to supply a reduced, unconfirmed, volume of milk to Arla under their new supply contract agreed last year.

Ian spoke to both Meadow, Arla and others and it’s a certainty that Arla gave notice reference the volume reduction to Meadow many months ago and possibly as some claim as long ago as last April so the volume reduction has been known about for a long time. In addition, given Arla’s extraordinary member milk price more milk from members was always a certainty.

Arla’s recent financial results demonstrated continued brand success and for sure it’s number one priority must be to process all the additional milk from expanding members consequently requiring less 3rd party milk from Meadow and others.

So, the big unknown is where will this surplus Meadow milk be placed and at what price/cost?

Most farmers grievance appears to be with Meadows Communication in terms of having known about it for months and on the face of it they conclude Meadow failed to take positive mitigating action.

Others highlighted the fact Meadow announced a healthy 25.6 million (4.65ppl profit on each litre processed) profit in January then announced extra 0.5ppl milk price increase to producers from 1st of February and March in full knowledge this cut was on the cards.

Some believe Meadow had two options to either serve contract termination notice or dramatically cut the price in the hope a heap will quit on the basis they have a few if any alternative buyers possibly with the exception of Yew Tree Dairies.

Serving more termination notices would likely have resulted in Meadow receiving a bigger kicking than it is.

Farmers claim they have to take the 24p on the chin with Meadow insisting any wanting to leave must serve their full 12 months’ notice leading some to say the Meadow master plan is to cut the price and have the cheaper milk for the longest possible period.

Its brutal at 24ppl especially given that price is only paid on the A litres and the April B price could easily be 20p or less. It’s a grim situation and little wonder some argue contract regulation is required. Meadow have handed a bag of hand grenades to those campaigning for contract regulation overnight! It was described by one person to Ian as “extremely reckless and irresponsible behaviour”. 

 0.5ppl Milk Price increase for Paynes Dairies (Liquid) suppliers – from 1st of March (13th March 2020)

This increase came as a surprise and part or all must surely be coming out of Paynes piggy bank as opposed to price increases achieved with customers from March 1st.

 

Credit to Paynes for announcing it which takes their standard liquid litre price to 26.2ppl.

 

First Milk (Cheese) hold its producer price until at least 1st of May (13th March 2020)

First Milk will hold its current member milk price until 1st May however in addition its 13th payment to members will double from 0.25ppl to 0.5ppl from April 1st for those members who have fully paid up their capital contribution.

 

This results in a manufacturing standard litre price of 27.63ppl and a liquid standard litre price of 26.75ppl. For members on the Tesco cheese contract the manufacturing standard litre price is 29.13ppl.

 

Belton Farm (cheese) to stand on/hold its producer price until at least 1st May (13th March 2020)

This results in a manufacturing standard litre price of 27ppl and based on a liquid standard litre 26.25ppl.

 

0.61ppl Milk Price reduction for Muller aligned suppliers to M&S – from 1st of April (13th March 2020)

This reduces the producer’s standard liquid litre price to 32.72ppl.

 

0.05ppl Milk Price reduction for Sainsbury’s aligned suppliers – from 1st of April (13th March 2020)

This reduces producer’s standard liquid litre price to 30.7ppl (Muller) and 30.58ppl (Arla).

 

Prices and Spot Milk could be heading for a meltdown (13th March 2020)

Spot Milk trading sat at 25p only a couple of weeks ago then suddenly shot up to 30/31p and today is back to 25p and dropping.

 

Coronavirus is causing a melt down and if the government introduces restrictions the dairy trade is buckling for a very rough ride with some expecting spot milk to be plentiful and quickly down to circa 20p as orders are reduced or cancelled on mass.

 

The problem is primarily in London where the food service industry is gradually grinding to almost a shut down and if schools and universities close it will be close to meltdown especially in coffee shops (people working from home won’t visit coffee shops) and restaurants.

 

As well as the possibility of schools and universities closing there is an expectation that Livestock Auctions could be closed. It’s starting to look very serious for the UK as it’s now official that the stats indicate we could be running around 4 weeks behind the pattern the coronavirus took in Italy which if proved to be correct will be extremely serious. 

 

 

Coronavirus (13th March 2020)

One prediction from the US Dairy Export Council claims a combination of reduced global demand and a backlog of product sitting in Chinese ports (particularly in the port of Shanghai) as well as heaps held up in distribution depots as a result of the virus could reduce global dairy prices by up to 7% this year.

 

The backlog is tipped to take months to clear and return to “normality” with what are predominantly dried non-perishable dairy products with numerous ships anchored off shore waiting to dock.

 

The number of confirmed cases in China and deaths appear to be declining rapidly on a daily basis. Let’s hope the same happens in the other 124 countries with confirmed cases.

 

Record day for Dairy futures trading (13th March 2020)

Last Wednesday 4th March EEX (The European Energy Exchange) reported a record-breaking hat-trick of daily figures trading with 5,475 tonnes traded involving 1095 contracts/deals.

 

It is the first time the 1,000 contract a day level has been breached in Europe since the launch of EEX in 2010. It was also the first time the 5,000-tonne level was exceeded in a day.

 

Arla branches out into producing Oat Milks (13th March 2020)

Arla has announced the launch of three new plant (oat) based milks called JORD, initially available in Denmark and due in the UK later this year.

 

Arla are not the first major dairy company to diversify into this rapid growth area and at the end of the day if these branded products are profitable, they should get into this market because the profits will flow to Arla’s Co-Op members.

 

Red Diesel duty is held by The Chancellor (13th March 2020)

Yesterday’s Budget left the duty on Agricultural red diesel at 11.1ppl as compared to normal fuel duty at 57.7ppl.

 

New Chairman of AHDB announced (13th March 2020)

It’s not been the best kept secret in the industry but AHDB have finally announced that Nicolas Saphir will replace Peter Kendall as Chairman of AHDB for what will be a 3-year term starting next month.

 

Until recently Nicholas was Chairman of the Organic Milk Co-operative OMSCO where he has achieved a great deal.  He is understood to be viewed more of a marketeer than Judith Batchelar, Sainsbury Director whom we understand he pipped at the post. 

 

The word from within the corridors of power is that 16 candidates were interviewed and reduced to a shortlist of two one of whom was Nick Saphir and the other was Judith Batchelar. Surprisingly it is also strongly rumoured the recommendation to the minister, following the interview process, was that Judith Batchelar was the preferred person to succeed Peter Kendall, but this was possibly vetoed which if true raises questions as to the process adopted by DEFRA. Clearly information received by Ian suggests Judith understandably a little disgruntled!      

 

At age 76 Nicholas has a comprehensive CV involving 61 Directorships of which 8 remain active.

 

 

0.9ppl Milk Price increase from Arla has left others furious (24th February 2020)

Rumours that Arla were set to increase its member Milk Price ahead of the spring flush were rubbished to Ian by several buyers last week as impossible.

Well Arla have once again done their own thing their way only this time they have really piled the pressure on GB milk processors ending a very impressive 14 month price hold (excluding minor currency adjustments) with a price increase of 1 Euro Cent.

 

All the talk last week, particularly from liquid processors, pointed towards them having already decided farmgate milk prices need to be cut particularly in respect of a dramatic fall in cream values which www.milkprices.com report as 10p KG in a week with the spot price now down to 25ppl.

If some of those buyers press ahead with planned farmgate price cuts taking their standard liquid litre prices below 25ppl its likely some farmers faced with no alternative milk purchaser will simply throw the towel in and hang their clusters up. Enough will be enough especially given the Arla member increase.

 

If Arla were to open its recruitment gates the queue would be very long and anything but orderly.

 

The latest Arla price increase of 1 Euro Cent results in the following 1st March conventional standard litre prices

                        Manufacturing 30.94ppl ( + 0.9ppl)

                        Liquid              29.75ppl ( + 0.86ppl)

 

Meanwhile the Arla Member Organic milk price has been reduced by the same 1 Euro Cent resulting in a manufacturing standard litre price of 39.98ppl and a liquid litre price of 38.44ppl.

 

GDT Average down 2.9% as Coronavirus cases increase (24th February 2020)

Last Tuesdays GDT Auction average fell for a second consecutive auction this time by 2.9% to average US $3176 tonne the lowest average price since January 2019. The results follow hot on the heels of a 4.7% fall only two weeks ago and this measn WMP has seen more than 8% wiped off its value in less than a month.

 

The escalating confirmed cases of Coronavirus are the key reason for the falls (see next story).

 

Key Price moves were:

   

            Butter down 3.9% to average $4090 tonne

            WMP down 2.6% to average $2966 tonne

            SMP down 2.6% to average $2840 tonne

            Cheddar up 5.3% to average $4526 tonne

 

Arla record positive financials but GB liquid is still its weak link (24th February 2020)

Arla’s 2019 results were heavily dependant on its continued performance in its branded sales and once again let down by its weak GB liquid market.

 

Arla’s branded sales grew by 5.1% in 2019 (+3.1% in 2018) and hence brands like its Butterbox and Box are proving very popular with modern consumers.

Diplomatically Arla’s UK MD Ash Amirahmadi commented “we are not immune from the profitability challenges facing the British liquid milk category, which remains a significant part of our business. Performance in this category held back our overall UK results in 2019.”

Given close to 50% of Arla’s UK milk goes into liquid surely as opportunities arise Arla will seek to reduce this exposure to a failing UK Liquid market. That’s a choice Arla can make given its breadth and portfolio, others have limited if any choices.

Both Arla and Muller have reduced costs significantly in the Liquid sector but its still not delivering the sustainable results it should.

Note Arla’s UK business accounts for almost 25% of its revenue.

 

The Chinese Coronavirus is hitting World Dairy Trade (24th February 2020)

 

There are no signs the Coronavirus has turned the corner with Tuesday 18th February recording 72,440 cases confirmed in China resulting in 1870 deaths and rising daily. Today, six days later, the number of cases in China has risen to 77,345 (+ 4,905) and 2593 deaths (+ 723).

 

The spread is exerting serious pressure on world dairy prices and despite Tuesdays GDT result analysts anticipate pressure will come on cheese prices given the Chinese food service industry has seen numbers of Chinese consumers eating out collapse.

 

In addition, there are reports that internal movement of refrigerated goods in China is slow as well as slow port unloading of refrigerated containers carrying imported dairy products.

Food chains including KFC and Pizza Hut have already closed down more than 30% of their Chinese outlets with total sales reported as down by 50% plus. 

Everyone is watching the figures hoping soon they will head South and that the virus will be short-lived but at the moment that’s certainly not the case.

 

 

 

 

1ppl Price Reduction for Crediton Dairy Suppliers – from 1st of March (7th February)

This ends an impressive price run by Crediton and results in a liquid standard litre price of 27.5ppl.

The reduction is attributed to poor cream values and comes as no surprise.

 

Belton Farm (Cheese) to stand on/hold suppliers milk price until 1st of April (7th February)

This maintains the current manufacturing standard litre price at 27ppl and based on a liquid standard litre at 26.25ppl.

 

Lactalis (AKA The Fresh Milk Company) to stand on for February and March (7th February)

This results in a minimum manufacturing standard litre price of 27.61ppl and based on a liquid standard litre of 26.5ppl.

 

South Caernarfon Creameries (Cheese) to stand on for February and March (7th February)

This maintains a manufacturing standard of 27.28ppl based on a standard litre price of 26.34ppl.

 

Wensleydale Creamery (Cheese) to stand on for February and March (7th February)

The February stand on is confirmed and the March one is TBC but anticipated. This maintains a manufacturing standard of 27.75ppl and a liquid standard litre of 26.8ppl.

 

Wyke Farms (Cheese) to stand on for February (7th February)

This maintains a manufacturing standard litre price of 26.91ppl and based on a liquid standard litre of 26ppl.

 

Pattemore’s Dairy (Liquid) to stand on for February (7th February)

This maintains producer’s standard liquid litre price at 26.25ppl and based on a manufacturing standard litre of 27.12ppl.

 

Graham’s Dairy (Liquid) to stand on for February and March (7th February)

This maintains a standard liquid litre price of 25.5ppl

 

Wells Farm Dairy (Liquid) to stand on for February (7th February)

This maintains a producer’s standard liquid litre price of 25.7ppl.

 

1ppl Milk Price increase for Pensworth Dairy (Liquid) Suppliers – from 1st of March(7th February)

This is a two part increase with 0.5ppl as a flat rate increase to the base price and the remaining 0.5ppl payable to supplying farmers who participate in Penworth’s animal welfare standards commencing in April.

Assuming over 50% (and it should really be 100%) uptake the new liquid standard litre price will be 25ppl.

 

0.5ppl Milk Price increase for Meadow Foods Suppliers – from 1st of March (7th February)

This increase results in a liquid standard litre price of 26ppl and based on a manufacturing standard litre of 26.38ppl (Cheshire/Midlands region) and 26.25ppl (Lake District/Cumbria).

 

It’s now pointing towards any liquid purchaser paying under 26ppl on March 1st as very much under the spot light and off the pace as the gap between the best and worst paying milk buyers rapidly closes.

 

GDT Price fall attributed to Coronavirus in China (7th February)

This week’s GDT Auction fell back sharply by 4.7% to average US$3226 tonne.

The fall in price was put down to the impact of the quickly developing Coronavirus in China with Dairy trade disrupted and slowing down.

WMP prices took a 6.2% battering however some New Zealand analysts had feared the drop in price could have been 10% or more. The best outcome for the world and dairy prices is for the virus to be quickly contained.

 

Key Price moves were

                                    WMP down 6.2% to average US $ 3039 tonne

                                    SMP down 4.2% to average US $ 2907 tonne

                                    Cheddar up 6.0% to average US $ 4302 tonne

 

Medina and Freshways will no longer be called M & F Dairies (7th February)

Inside sources have confirmed that the Freshways takeover/merger with Medina will no longer be named M & F Dairies as reported on 5th of November. The full nickname for M & F Dairies as suggested by a couple of middle ground customers will therefore no longer be the source of amusement. 

 

In a recent article Kevin White of the Grocer points to almost a branding merger between the two processors with all address references to Freshways Acton HQ. In addition, Kevin’s article points to a carve up of the two distribution networks indicating a very close working relationship.

 

Some of the quotes in The Grocer’s article are likely to raise eyebrows within the Competition and Markets Authority (CMA) who it is claimed have been asked to take an interest in the merger/takeover especially with reference to its market share in the South-East.

 

Freshways appetite for Spot Milk is believed to be a combination of two factors (7th February)

Reports of Freshways suddenly seeking both 3rd party processing and packing plus relatively large volumes of milk including spot milk has left a few of us puzzled. It is claimed that Freshways have lost significant volumes of milk in South Wales but more importantly there are very strong rumours that the Muller Dairy Crest 5 year Medina deal ending has had the biggest impact.

 

Back in the Autumn of 2015 the CMA gave the green light to the Muller take over of Dairy Crest’s liquid business subject to Muller providing up to 100 Million Litres a year of toll processing to Medina from Severnside, Gloucestershire.

It is believed Muller have decided to end the facility from 1st of April following Freshways involvement with Medina which has put pressure on the combined businesses. This is likely to be the reason why Freshways are seeking additional processing. In addition, there are rumours suggesting changes at Severnside as part of Project Darwin.

 

 

1ppl (0.5p + 0.5p) milk price increase for Freshway suppliers – from 23rd February PRODUCER NOTIFIED (31st January)

Freshways join Meadow and hopefully others who have been paying a relegation liquid standard litre price of 25ppl or less and now have to get back amongst the pack or risk losing supplying farmers.

 

This 1ppl increase is not automatic and comes in two parts.

 

0.5ppl will only be paid to suppliers who remain within a 5% tolerance of their monthly A litre volume – note not B litres.

 

So, if you fall short by 6% you will not retrieve this 0.5ppl. Note Freshways are only concerned over those suppliers who fall short on deliveries.

 

The remaining 0.5ppl will be paid on all A litres.

 

If the full 1ppl is achieved the Freshways standard liquid litre will increase from 25ppl to 26ppl.

 

Arla continues with a 14 month stand on milk price – until 1st March   (31st January)

Its another fantastic result for the European giant and means producers prices for conventional and organic milk will be held at current levels until at least 1st March.

 

The conventional manufacturing standard litre price remains at  30.04ppl and based on a standard liquid litre holds at 28.89ppl.

 

Arla’s member organic milk price also remains unchanged at 40.88ppl (Manufacturing) and 39.30ppl (Liquid).

 

The last Arla member price reduction was 1.33ppl on  1st of January 2019

 

Barbers (cheese) stand on for a 5th consecutive month   - until 1st April (31st January)

This maintains Barbers standard manufacturing litre price at 27.79ppl and based on a liquid standard litre at 26.8ppl.  Barbers producers excess litres, AKA B price, is confirmed at a healthy 29.43ppl for January suppliers.

 

Glanbia (cheese) stand on\hold its price until at least 1st March (31st January)

This maintains a manufacturing standard litre price at 27ppl and based on a liquid standard litre 26.1ppl.

 

0.5ppl milk price reduction for suppliers to Saputo (AKA Dairy Crest Davidstow) from 1st March (31st January)

Whilst this price reduction is unwelcome it has to be put into context as to where it sits and its history.

 

Firstly, DCD and Saputo have agreed the new 1st March 2020 standard manufacturing litre price of 28.7ppl is a minimum four-month floor price until 1st July 2020. This is a welcome move and provides stability during the Spring flush in terms of it can only be this price or better. Note based on a standard liquid litre the minimum floor price will be 27.62ppl.

 

The Saputo price was held at 29.9ppl for an impressive 12-month spell and some would claim a reduction is overdue and somewhat inevitable. One cheese processor recently commented to Ian that “The Saputo and Arla farmgate prices have defied gravity”. It’s still up there with the best and in a champions league placing with everyone now way behind Arla whose performance currently matches Liverpool.

 

Market Update  (31st January)

Spot milk prices are still holding at 27p to 28p with regular reports that Freshways are the main regular buyers of spot milk and are short on volume.

 

A key challenge for liquid processors who are paying a liquid standard litre price at the top end is balancing the books at current cream prices.

According to AHD Dairy the January 2019 bulk cream price was £1710 and one year later was down to £1300 representing a 24% fall.

 

Price moves for February and March will fall into two distinct camps.  Those who dropped too low for far too long who need to lift prices or risk supplies. Which boils down to liquid processors paying 25p or less.

Then there are bottom end cheese processors paying 27p or less.

Finally, those who have held prices high for as long as possible in the hope they didn’t have to drop who are now forced to adjust. 

 

There is a small glimmer of hope for prices in the second half of the year especially for Cheese processors who will be praying that the currency will not strengthen to the point it sucks in cheap imports which would put a spanner in the works.

 

 

 

 

GDT average up another 1.7% (21st January)

Hot on the heels of the 7th January 2.8% jump comes todays 1.7% lift to average US $3434 tonne, for 33,050 tonnes sold (33,165 sold 7th January).  The number of active bidders continues to rise this time to 191.

 

Butter     + 5.5% to average US $4,250 tonne

WMP      + 2.4% to average US $3,233 tonne

SMP       + 0.7% to average US $3,036 tonne

Cheddar + 0.6% to average US $4,048 tonne

 

All of the above average prices are well over the 17th December 2019 Auction results when prices surprisingly crashed back by 5.1% to $3,302 tonne.

 

0.5ppl Milk Price reduction for First Milk Members from 1st of February (21st January)

 

This takes producers standard manufacturing litre to 27.38ppl and based on a standard liquid litre to 26.5ppl.

 

Pattemores Dairy (Liquid) price hold until 1st of March (21st January)

 

This maintains producer’s standard liquid litre price at 26.25ppl and based on a manufacturing standard litre at 27.12ppl.

 

0.5ppl Milk Price increase for suppliers to Meadow Foods – from 1st of February (21st January)

 

It’s presumably pure co-incidence that at the same time as Meadows March 2019 profits were announced (see below) the company announced 0.5ppl farmgate milk price increase from 1st February.

 

Meadow were the only large processor to drop its liquid standard litre price to 25ppl from 1st of September with an eye watering 1.75ppl drop which has lasted for 5 months and well below all other major GB milk processors farmgate milk prices.

 

The increase results in a liquid standard litre price of 25.5ppl and based on a manufacturing standard litre price to 25.87ppl (Cheshire/Midlands) and 25.75ppl (Lake District/Cumbria).

 

32ppl for Spot Milk but now softening (21st January)

 

Spot sales have been running at 32ppl for most of January but now appear to be softening and this week have dropped under 30ppl between 27 to 29ppl.

 

The spot trade is very volatile but does give us a feeling of the market temperature. Supplies were reported as slightly short of demand earlier this month hence the high spot price for a couple of weeks.

 

Healthy £25.6m pre tax profit for Meadow Foods (21st January)

 

Meadow Foods 31st March 2019 pre tax profits have weighed in at a very healthy £25.6 million which should delight its private equity group owners.

 

On an estimated milk throughput of circa 500 million litres this profit represents a healthy 4.65ppl significantly more than a large chunk of Meadow farmer suppliers earnt.

 

DEFRA’s math’s is called into question for a second consecutive month (21st January)

 

Defra has declared its November 2019 average farmgate milk price at 29.69ppl an increase of 0.3ppl on the October average (29.35ppl). Admittedly the months fat and protein numbers were up but this increase comes in a month when processor prices either fell or stood on.

 

It has to be noted the 29.69ppl is not a standard litre price and with November milk quality averaging 4.3% fat and 3.47% protein AHDB Market Intelligence say this quality adds at least 1ppl to the so called standard litre price. Despite this at 29.69ppl it’s an eyebrow raising price.

 

Sainsburys watch on as another of its suppliers wants out (21st January)

 

It seems wherever the name Sainsburys appears and dairy together its often associated with devastating news.

 

Now NFT a distribution firm close to our offices in Derbyshire who employ close to 2,000 people are seeking a new buyer with the help of Pricewaterhouse Coopers.

 

NFT’s biggest customer is Sainsburys for whom NFT transport their chilled food and drink to stores across GB.

 

The NFT business lost £31 million to September 2018 and the figure to 2019 is yet to be declared but the odds are firmly in favour of a deterioration in what was already a shocking set of 2018 financials.

 

According to Sky News “Sainsburys declined to comment” surprise, surprise.

 

So, Medina take Sainsburys on as its main customer and in under two years its annual results were crippling. Tomlinson’s went into administration with Pricewaterhouse Coopers (PWC) called in following two years of having Sainsburys as its largest customer. Now PWC are handling the attempt to sell NFT who also have Sainsburys as its main customer. There appears to be a common link here.

 

The list of Sainsburys suppliers who have to learn quickly to ‘Live well for less’ continues to grow.

 

 

 

0.26ppl Milk Price reduction for Tesco (TSDG) producers – from 1st of February (3rd January)

This results in a liquid standard litre milk price of 30.93ppl (Arla) and 31.18 (Muller) for the next quarter.

 

Virtually all Milk Purchasers stand on with 2020 Milk Prices (3rd January)

Other than the reported Tesco (see above) and Saputo (AKA Dairy Crest) 1st February farmgate milk price reductions according to our information all milk purchasers have stood on for January and in many instances February suggesting a period of stability.

 

The milk buyers who have recently confirmed to Ian that their price is a stand on are as follows:

 

Belton Farm (Cheese)   hold for January and February with standard litre prices of manufacturing 27ppl

& Liquid 26.25ppl.

Crediton Dairy (Liquid)   hold for January and February with a standard litre price of 28.5ppl Liquid. This price has been held for 11 months and in February 2018 Crediton’s producer milk price was 28ppl!

            Dale Farm (Kendall)      hold for January with a standard litre price of 26.14ppl Liquid.

Muller Direct                 hold for January and February with a standard litre price of 26.25ppl Liquid which includes the 1ppl Muller Direct Premium / 13th payment.

Barbers (Cheese)           hold for January and February with standard litre prices of manufacturing 27.79ppl & 26.8ppl liquid.

 

 

0.01ppl Milk Price increase for CTRG Members – from 1st of February (3rd January)

This takes producers standard liquid litre milk price to 29.39ppl.

 

General Market Update/Snippets (3rd January)

According to AHDB Dairy’s bean counters the 2019/20 GB Milk year is on target for a 29 year production high at 12.58 Billion Litres despite the dairy herd having reduced by 1.75 million head (-2.4%)

 

During 2019 UK imports of Irish Cheddar were set to break a 20 year plus record mainly due to processors stock piling against a no deal Brexit.

During the nine month period January 2019 to September 2019 imports were up a staggering 24% to almost 90,000 tonnes.

 

AHDB also report:

Cream prices fell more than anticipated in the run up to Christmas down 15% on the month and down 22% compared to December 2018, Cream Price values to a liquid processor were at their lowest value for 3 years plus at 7.4ppl.

Butter & Mild Cheddar more or less stable in terms of the December average.

SMP Prices continue to rise but only by 3% in the month.

 

 

612 Producers in England & Wales left in 12 months (3rd January)

England & Wales Producer numbers in 2019 fell by 612 from 9169 to 8557.

 

LAND / FARM WANTED IN HAMPSHIRE OR THE ISLE OF WIGHT (3rd January)

We have been asked to post this advert by a couple with rollover money who intend to buy land in Hampshire or the Isle Of Wight. They would consider a complete farm or parcels of land subject to a minimum 20acres. Please contact ianpotter@ipaquotas.co.uk with any details. An intensive unit would not be ruled out with less than 20 acres.

 

 

For Sale (3rd January)

Ian’s Office 4 and 2 Station Solid Office desks and 9 Chairs for Sale on Ebay.

Due to a complete office refurbishment we have the following for sale:

 

2 x 4 Station Desks – Ebay Item Number 274160018173 and 2741160023160

1 x 2 Station Desk –   Ebay Item Number 274160025914

9 x Swivel Office Chairs –

4 of Ebay Item Number 274160028940

3 of Ebay Item Number 274160031175

            2 of Ebay Item Number 274160033577

 

If you are interested please follow the link below and then click on see other items.

 

https://www.ebay.co.uk/itm/office-desk-4-person-Multi-Person-Office-Work-Station-Call-Center-Cluster-Desk/274160023160?hash=item3fd535f678:g:I0UAAOSwvARd8gRG

 

 

 

 

GDT 5.1% price drop is a bombshell – (23rd December)

Last weeks GDT Auction saw the average price drop by a whopping 5.1% to US $3302 tonne for the 35,748 tonnes on offer. The result was both unwelcome, unexpected and unexplained.

 

Notable movers were:

WMP down 6.7% to average US $3099 tonne

SMP down 6.3% to average US $2867 tonne

Butter down 2.4% to average US $3886 tonne

Cheddar up 1.7% to average US $3869 tonne

 

0.7ppl Milk Price reduction for Saputo (AKA Dairy Crest) Davidstowe suppliers from 1st February – (23rd December)

This reduction ends an impressive 12 month hold at a 29.9ppl manufacturing standard litre price.

From 1st of February 2020 the Saputo/Dairy Crest manufacturing standard litre will be 29.2ppl and based on a liquid standard litre of 28.12ppl.

 

Arla Stand on price hold continues and has now completed a 13 month run – (23rd December)

Arla members conventional milk price will hold for January 2020 at 30.04ppl based on a manufacturing standard litre and 28.89ppl on a liquid standard litre.

The last Arla member price reduction was 1.33ppl from 1st of January 2019 which means this is a very impressive 2019 calendar year hold and still running.

Note there have been a few tiny currency smoothing changes which during that 13 month period have resulted 30.24ppl standard litre price (January 2019) slightly reducing to 30.04ppl (January 2020).

Arla’s member organic milk price also remains unchanged at 40.88ppl (Manufacturing) and 39.30ppl (Liquid).

 

Lactalis (AKA Caledonia & The Fresh Milk Company) to stand on until 1st of April 2020 – 23rd December)

Lactalis will hold its supplier milk price until 1st April 2020 at a minimum floor at 27.61ppl based on a manufacturing standard litre and 26.5ppl based on a liquid standard litre.

 

Barbers (Cheese) to stand on/hold its supplier Milk Price for January – (17th December)

This maintains Barbers standard manufacturing litre price at 27.79ppl and based on a liquid standard litre at 26.8ppl.

 

Wyke Farms (Cheese) to Stand on/hold its producer price for January – (17th December)

This maintains a manufacturing standard litre price of 26.91ppl and a liquid standard litre price of 26ppl

 

Nampak business on life support should send shivers down industry spines – (17th December)

More evidence of serious fresh milk industry supply chain stress. Nampak is a significant UK milk bottle manufacturing business whose accounts which were recently published showing significant losses of £2.7 million in 2018 with an eye watering pension fund liability of almost £28 million.

 

Excluding Nampak’s significant restructuring costs the years efforts leave a small 2018 profit of only £124,000 (£3.75 million loss in 2017) on a turnover of £76 million (£84 million in 2017). That’s a margin of 0.1%.

 

On further investigation its rumoured that Nampak had an immediate crisis on their hands last week and were urgently seeking significant (as in several hundred thousand) blow moulded liquid containers from competitor blow moulding factories in the run up to Christmas for which Nampak are unable meet the extra demand, middle ground Nampak customers include Paynes Grahams, Medina, Arla & Trewithen to mention a few.

  

Nampak rumoured to have sold out to so called “Vulture Fund” Greybull – (17th December)

As this edition went to the send box there are very strong rumours that Nampak have sold their UK bottle blowing factories to Greybull who are badged as rescuers of distressed businesses with a view to turning them around.

 

This sale should send further shivers down the spine of all involved in the UK liquid business including responsible retailers and those in the food service.

Greybulls previous acquisitions include British Steel, plus Rileys Snooker, Morrisons M. Local Stores, Monarch airlines and Comet all of whom ended up in administration with Greybull pocketing its fees which has led some to refer to them as a “Vulture fund”

 

These are two grim news stories to have in the run up to Christmas which further highlights the perilous state the GB Liquid milk market is in. Houston we have a problem and desperately need International Rescue the liquid business is in meltdown and what can only be described as on life support and those at the retail and wholesale end of the chain should be worried.

 

No Christmas cheer for 72 Tomlinson’s and Sainsbury’s farmers – (17th December)

PWC the administrators for the collapsed Tomlinson’s Dairies Limited have issued their proposals and its very depressing reading.

 

The key points are that the 72 farmers (Tomlinson’s directs plus Sainsbury’s group) are unlikely to receive any payment from the administration. HSBC are owed £15.6 million and this is unlikely to be fully repaid with finance Wales Investments highly likely to join the farmers for a nil payout on the £1.8m it is owed.

Officially the report states that unsecured creditors will receive between 0p to 3p in the £1.

There are 11 finance agreements in the queue for payment.

Of the other creditors the notable ones are:

                                    Milk Supplied by 72 farmers       £3.3m (43 days milk)

                                    Arla Foods                                £1.66m

                                    Kite Consultancy                       £37k

                                    OMSCo                        £89k

                                    Lloyd Fraser Haulage                 £438k

                                    Willis Haulage                           £118k

 

PWC have had interest from 58 potential buyers for the assets but none have resulted in an acceptable bid hence the assets will be broken up presumably by Auction in the New Year.

Tomlinson’s are undoubtedly another Sainsbury’s casualty having folded after only 2 years of a 3 year Sainsbury’s contract. Its history requires no detailed analysis.

                                    2016     £1.6m profit

                                    2017     £1.7m profit - on a £50 million turnover with 100 million litres

                                    2018     £4.3m loss - Sainsbury’s 3 year contract commenced processing 200 million litres.

                                    2019     £2.7m loss

 

Curiously Sainsbury’s have lodged “a significant counterclaim” on October 10th but no one has further details as to what this claim relates to. A smart guess would be it relates to the interest free loans JS have arranged via Muller to the affected farmers.

 

Wensleydale (Cheese) 0.6ppl reduction from 1st December (2nd December)

This results in a manufacturing standard litre price of 27.75ppl and a liquid standard lire price of 26.8ppl.

 

Dale Farms Northern Ireland 0.25ppl reduction in base price from 1st October (2nd December)

This results in a standard liquid litre price of 25.59ppl.

 

Belton Farm (Cheese) to stand on/hold its producer price until at least 1st February (2nd December)

This results in a manufacturing standard litre price of 27ppl and a liquid standard price of 26.25ppl.

 

Muller to Stand on/hold its producer price until at least February 1st. (2nd December)

This maintains a standard liquid litre price of 25.75ppl

 

Meadow Foods to Stand on/hold its producer price for December (2nd December)

This maintains a standard litre price of 25ppl.Meadow Foods January milk price to be confirmed this week.

 

South Caernarfon Creameries to Sand on/hold its producer price until at least 1st of February - (2nd December)

 

This maintains a manufacturing standard liquid price of 27.28ppl and a liquid litre price of 26.34ppl for both

December and January.

Patmore’s (liquid) to Stand on/hold its producer price until at least 1st February - (2nd December)

 

This maintains a standard liquid litre price of 26.25ppl and based on a manufacturing standard litre of 27.12ppl

 

Saputo (Davidstow AKA Dairy Crest) to stand on/hold its producer Milk Price until at least 1st February. - (2nd December)

This is an impressive 11th consecutive month hold at a manufacturing standard litre price of 29.90ppl and based on a liquid standard litre 28.82ppl.

 

Wyke Farms (Cheese) to Stand on/hold its producer price for December - (2nd December)

This maintains a manufacturing standard litre price of 26.91ppl and a liquid standard litre price of 26ppl

 

Glanbia (Cheese) to stand on/hold is producer price until at least 1st February - (2nd December)

 

This maintains a manufacturing standard litre price of 27ppl and a liquid standard litre price of 26.1ppl.

 

Wyke Farms (Cheese) & Lidl announce 28ppl 3 year fixed price option - (2nd December)

 

Wyke Farm suppliers now have the option to fix a minimum of 10% up to a maximum of 50% of their milk output for 3 years starting from the 1st of January 2020 to 31st December 2022 at 28ppl.

It’s another Lidl fixed price deal to come to market this time targeted at Wyke producers, As Wyke Farms Andrew Gaskell commented “It is a ground breaking offer in the UK cheese Industry”

In the event the offer is oversubscribed over and above the initial 30 million litres required then scale back is likely to be applied and in the unlikely event the full allocation is not taken famers at the 50% level might be able to increase their commitment above the 50% threshold.

All producers who opt to fix at 28ppl are guaranteed a minimum 10% allocation but fix means it’s fixed for all parties.

 

DEFRA’s maths is once again called into question - (2nd December)

 

 

DEFRA are claiming the average farm-gate milk price for October was an eye watering 29.35ppl. In addition they claim the average price paid in September was 29.47ppl which is suspect and certainly warrants further investigation.

 

For October the standard liquid litre price for non aligned ranged from 24ppl to 29.02ppl (Arla) and on a standard manufacturing litre the range was 26.91ppl to 30.19ppl (Arla). Note DEFRA do not include any retrospective bonus/13th payments in the 29.35ppl figure. Its milk price reporting claims to cover 94% of processors in England & Wales.

In addition the DEFRA 29.35ppl is the average price paid to producers not a standard litre price but it simply looks horribly wrong. 

DEFRA’s bean counters unfortunately have a track record of poor number crunching. In April 2016 this bulletin reported it’s irresponsible and misleading calculation with DEFRA claiming the February 2016 milk price had jumped by 2.48ppl in a month from 23.09ppl to 25.57ppl. DEFRA dug their heels in and refused to backdown but subsequently secretly amended the 25.57ppl figure dropping it down to 23.01ppl without admitting they were wrong!

 

See top story from this link – Bulletin 04.04.2016

 

Ian has emailed his story to the person responsible in DEFRA julie.rumsey@defra.gov.uk

 

 

 

Muller Direct 2020 premium to double as calf euthanization is added. - (2nd December)

 

Muller has doubled its Muller direct Premium from 0.5ppl (2019) to 1ppl (2020 calendar year) subject to Muller Direct farmers meeting certain conditions one of which is by December 2020 those wanting to qualify for the premium must have stopped any on farm practice of euthanizing healthy calves unless the practice is backed up by a veterinary letter. Such a letter will be required before euthanization of any calves under TB restriction will be considered acceptable.

 

The premium is only available to Muller Direct producers and not available to Muller farmers on aligned contracts for their core supplies or their discretionary priced supplies.

The 1ppl will be paid to those who have qualified in January 2021 and there is no need to opt in or opt out because farmers either meet the conditions or they don’t. Note those farmers unfortunate enough to have received a minimum 12 months notice from Muller to terminate their supply contract will be eligible for the 1 ppl premium however those farmers having served notice to leave Muller at 31st December 2020 will not receive any premium in January 2021.

 

 

For Sale (2nd December)

Ian’s Daughters 1.2 Litre Polo for sale £800 – only 2 Lady owner’s from new.

Email ianpotter@ipaquotas.co.uk for a full specification but note –

1 years MOT

It has just (6 miles ago) had a new clutch, new catalytic convertor, new exhaust/silencer and new coil spring.

Its on BF Goodrich winter tyres

Very well maintained and in great condition.

 

 

 

 

 

0.4ppl milk price increase for farmers supplying Wells Farm Dairy liquid is the first conventional liquid processor rise since October 1st 2018    - PRODUCER NOTIFIED - (22nd November)

 

Throughout 2019 this bulletin has been a catalogue of processor price reductions and stand on prices.

 

Wells Farm dairy surprised most if not all of its 50 or so local farmer suppliers with the announcement that from December 1st their milk price will increase by 0.4ppl to give a liquid standard litre price of 25.7ppl. One swallow doesn’t make a summer but it’s a positive step in the right direction and should have been well received by most if not all of Wells farmers.

 

The last time we reported a processor price increase was a 0.21ppl price increase from October 1st 2018 so 14 months until this one has hit the radar. Although the Wells Dairy notice appears to be only 14 days few if any farmers will grumble at the fact its not voluntary code compliant.

It’s the first and could be the only 2019 processor farmgate milk price increase in 2019.

 

Arla to hold its Member conventional Milk Price for an 11th consecutive month. – (22nd November)

Arla has today confirmed a stand on member milk price for an 11th consecutive month starting 1st of December at 30.19ppl  based on a manufacturing standard litre and 29.02ppl (liquid standard litre).

Arla state that “The outlook for the milk price for the coming months remains stable” which for Arla members is a positive note to end the year on.

 

Arla’s UK organic members standard litre milk price is also unchanged with its manufacturing standard litre at 41.03ppl and based on a liquid standard litre 39.43ppl. In the commentary mention is made that demand growth for organic remains weak with continued strong supply across all of Arla’s markets and they conclude by stating “the outlook ( for organic ) is uncertain“.

UK organic milk sales have declined for a number of reasons throughout 2019 which remains  a concern

 

Saputo (AKA Dairy Crest Davidstow Cheese) to stand on/hold its suppliers milk price from 1st December until at least the end of the year – (22nd November)

This announcement maintains the Davidstow manufacturing standard litre price at 29.9ppl and based on a standard liquid litre at 28.82ppl.

 

First Milk Cheese Member price to stand on/hold from 1st December until at least the end of the year – (22nd November)

This announcement maintains the Co-ops manufacturing standard litre price at 27.9ppl and based on a liquid standard litre at 27ppl.

 

Paynes Dairies (Liquid) to stand on/hold its producers Milk Price for December  - (22nd November)

This means the existing liquid standard litre price of 25.75ppl continues.

 

 

 

 

 

0.5ppl milk price reduction for suppliers to Dale Farm Kendall   - From October 1st      -   (22nd November)

This is a backdated price cut results in a 1st October standard liquid litre price of 26.14ppl.

 

0.5ppl milk price reduction for suppliers to Grahams Dairies (Scotland) from December 1st    (22nd November)

This reduces producers liquid standard litre milk price to 25.5ppl.

 

Dale Farms Northern Ireland stands on/hold members milk price from September 1st      (22nd November)

This maintains Dale Farms (NI) standard liquid litre price at 25.84ppl.

 

Grahams declare a profit in its annual results – (22nd November)

In its year ending 31st March 2019 Grahams has declared a £2.2 million profit before tax up from 1.3 million (2017 & 2018) with turnover up £4.9 million (4.7%) to £109 million.  The business also invested £5.6 million of capital during the year.

Note in 2018 the 1.3 million reduced to a pre tax profit of £400.000 due to exceptional costs. The numbers may sound big but as a return on capital they are nothing to trumpet.

 

GDT average up 1.7%- (22nd November) - (22nd November)

Tuesday GDT Auction produced on all products average up 1.7% to average US $3481 tonne for the 37,968 tonnes sold to 134 buyers. The GDT price rises are predicted to continue until into 2020 due to increasing global demand out pacing milk supply which is flat lining and static. On the back of the recent GDT results New Zealand milk price forecasts are expected to rise again.

Notable price movements were:

 

SMP       + 3.3% to average $3,017

Cheddar  + 2.5% to average $3,701

WMP      + 2.2% to average $3,321

Butter     -  1.3% to average $4,061

 

AMPE leap frogs MCVE – (22nd November)

The AHDB AMPE price (Actual MILK Price Equivalent) for October stands at 30.21ppl and has leap frogged the MCVE (Milk for cheese value equivalent) at 30.09ppl for the first since mid 2018.

 

Sainsburys and Tomlinsons Sainsburys farmers are heading for a bitter legal battle. (22nd November)

The Tomlinson Sainsbury’s farmer battle is expected to move to stage 2 because clearly the retail giant has maintained its image of having skin as thick as a rhinoceros. 

Sainsbury’s Dairy Development Group 2007 inception publicity proudly trumpeted that it would work with its farmer suppliers “to ensure sustainable profits for them (I assumed them refers to the farmers and not Sainsbury’s!) and a sustainable source of British milk for our customers”. 

 

Sainsbury’s has let down those farmers it enticed to move from Muller to Tomlinson’s two years ago and far from receiving a fair price based on cost of production for 43 days milk they have received zero payment.

 

It is understood that lawyers are the next and only way to resolve the matter and the hope is that all of the Tomlinsons/Sainsburys farmers stick together shoulder to shoulder and none wimp out when it comes to going head to head with the retail giant.

 

Tomlinsons folded with 331 employees made redundant and around 67 dairy farmers pockets hit hard.

 

 

For Sale

 

Ian’s Daughters 1.2 litre VW Polo is for auction on EBay - ends This Sunday 23rd

Only two female owners from new, drives well and has been well maintained and is in great condition

 

https://www.ebay.co.uk/itm/VW-Polo-1-2-litre-two-lady-owners-from-new-Very-well-maintained-and-condition/274097140342

 

 

EBay item number:  274097140342 

 

Remember this bulletin continues to be available free of charge and takes Ian & the team considerable time to produce. The only encouragement to keep producing it is a combination of enthusiasm, tag sales & enquiries from our readers

 

 

All views expressed in this bulletin are those of Ian Potter Associates and a shed load of dairy farmers.  It is necessarily short and cannot deal with various issues that arise in any detail.  As a result it must not be relied on as giving sufficient advice in any specific case.  Every effort has been made to ensure the accuracy of the content but neither Ian Potter Associates nor Ian Potter personally can accept any liability for any errors or omissions.  Professional advice must always be taken before any decision is reached.  For our privacy policy please log onto our website www.ipaquotas.co.uk

 

AMPE & MCVE continue to head North   (5th November 2019)

Both market indicators are showing positive signs of recovery see above.

 

Wyke Farms to Stand on/hold it’s supplier price for November       (5th November 2019)

 

This is one of the final November Milk Price announcements and results in a standard litre manufacturing price of 26.91ppl and based on a liquid standard litre 26ppl.

 

Barbers (Cheese) to stand on/hold its supplier price for December    (5th November 2019)

 

This maintains Barbers standard manufacturing litre price at 27.79ppl and based on a liquid standard of 26.8ppl

 

Glanbia (Cheese) to stand on/hold its supplier milk price until at least January 2020       (5th November 2019)

 

This maintains Glanbia’s standard manufacturing litre price at 27ppl and based on a standard liquid litre 26.1ppl.

 

Belton Farm (Cheese) to stand on/hold its supplier price for December                     (5th November 2019)

 

This maintains Belton’s standard manufacturing litre price at 27ppl and based on a liquid standard litre of 26.25ppl.