45p 1st July price and the Aspiration to pay 50p by 1st September by Freshways
Posted on: 23/06/22
Back in early May Freshways announced a 1st July minimum farmgate milk price of 44ppl and a target of 45ppl. The 45ppl is now confirmed and clearly from the emails Ian has received several Freshways suppliers feel short changed given virtually all liquid processors are paying between 46 to 47ppl from July 1st with Arla yet to declare.
Freshways have now announced a 1st September target of 50ppl.
This means Freshways have leap frogged both June 1st and August 1st price increases with their suppliers presumably remaining on 45ppl until September 1st which should be the lowest GB liquid price for August.
In addition, Freshways have declared that any B (excess) litres produced between July to November will be paid at the A litre price as a minimum.
Some Freshways producers believe this is leaving them short, although the actual B price is TBC. Compare this discretionary B price to the transparent one operated by Barbers which is simply AMPE less 2ppl. This means Barbers farmers have been paid 52.5ppl (March), 54.3ppl (April) and 53.1ppl (May) on their B litres.
Spot milk is already trading at 58 to 60ppl (delivered to the processor) so given Freshways need to regularly buy spot milk at these levels it seems logical that they should pay 50p or more to their loyal producers in order to encourage them and retain them and save themselves some money.
In the letter to producers Bali states “we currently believe that the spot price for August and for the trough months in the milk calendar will be in the region of 50p”. Ians intelligence suggests that Freshways are 10p wrong and that a figure closer to 60p including the month of July will be closer to the mark.
Ian doubts many in the industry “believe” Bali Nijjar in his bold claim that in announcing its aim to pay 45p for July milk “Freshways set the pace for other processors”.
At the Dairy UK Dinner last week all prayer mats were certainly pointing to Leeds to lift dairy prices and not to Acton. On that score Arlas July milk price will be announced early next week which is more likely to grab the industry’s attention than Freshways September 1st aspiration. Watch this space on Tuesday or Wednesday.