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Dairy Industry News and Features

Our Weekly News Bulletin is available by email. To receive it please email info@ipmsltd.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.}

^{Remember this bulletin continues to be available free of charge and takes the team at Ian Potter Associates 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 Lydia Clare 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 click here.}

13/03/20

0.61ppl Milk Price reduction for Muller aligned suppliers to M&S – from 1st of April

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

13/03/20

0.05ppl Milk Price reduction for Sainsbury’s aligned suppliers – from 1st of April

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

13/03/20

Prices and Spot Milk could be heading for a meltdown

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.

13/03/20

Coronavirus

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.

13/03/20

Record day for Dairy futures trading

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.

13/03/20

Arla branches out into producing Oat Milks

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.

13/03/20

Red Diesel duty is held by The Chancellor

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

13/03/20

New Chairman of AHDB announced

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.

24/02/20

0.9ppl Milk Price increase from Arla has left others furious

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.

24/02/20

GDT Average down 2.9% as Coronavirus cases increase

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).

24/02/20

Arla record positive financials but GB liquid is still its weak link

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.

24/02/20

The Chinese Coronavirus is hitting World Dairy Trade

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.