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 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 click here.

Whopping Surprise 21% Lift in GDT WMP Auction Price

Yesterday’s fortnightly GDT auction recorded an unbelievable result with WMP up 21% in only two weeks and the overall all products average up 15%. This was the 8th consecutive auction rise and recorded a 7-year high averaging US $ 4231 tonne. The surge in demand is Chinese driven as the Chinese government continue to push to hold higher quantity of food stocks.

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1ppl Milk Price Reduction for Suppliers to Freshways Plus Conformation of No Further Price Cuts and a Future 1.5ppl Increase

Freshways have confirmed a 1ppl milk price reduction from March 1st. This takes producers standard liquid litre price to 26ppl. In addition, Freshways have confirmed that this 1ppl drop will be the last and that by 1st July the standard litre price will increase by 1.5ppl to 27.5ppl.   

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0.44ppl (0.5 euro cent) Surprise Milk Price Increase for Arla Members will leave competitors scratching their heads

Its not the first time Arla have pulled a rabbit out of the hat and gone in the opposite direction to its smaller competitors. Todays 0.44ppl increase on conventional and organic milk has come as a pleasant surprise to most but an unwelcome one to some other liquid processors who have already announced price cuts.  The resulting 1st March member standard litre prices based on www.

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Freshways and Medina are Officially in Merger Negotiations

The two middle ground liquid processors have today confirmed they are in detailed (and indeed advanced) merger negotiations subject to approval from the Competitions and Markets Authority. The merger was first suggested on the 5th November 2019 news page of this bulletin. For sure, the merger makes sense for the UK Liquid Dairy Industry, which desperately needs to voluntarily rationalise if it is to stand any chance of a sustainable and profitable future.

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The Market Snapshot

www.milkprices.com report delivered spot milk trading in a range 28 to 30ppl down a bit from the 30 to 32ppl the previous week when quantities traded were almost negligible due to a drop in production during the cold snap.   The average delivered spot milk price for December came out at 26.53ppl, equivalent to 24ppl (ex farm equivalent).  Bulk cream prices continue to firm on a weekly basis which is excellent news, particularly for liquid processors.

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Asda extends its cheese commitment to Arla until 2024

More encouraging news from the Arla camp with the conformation that the sole supply cheese sourcing deal with Asda is to continue until at least 2024. 

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GDT AUCTION RECORDS A NEW 7 YEAR RECORD AVERAGE

This Tuesdays fortnightly GDT Auction rose a further 3.0% to average US $ 3746 tonne and  continues an incredible  run of 10 increases from the past 11 Auctions since 1st September 2020 covering a 6 month period.   All averages for all products increased.   WMP increased by 4.3% to average US $3615 tonne Cheddar increased by 2.4% to average US $4268 tonne Butter increased by 2.

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Grahams Dairy Scotland (Liquid) to stand on until 1st April

This maintains producers liquid standard litre price at 27ppl. Its an achievement which deserves some credit given Grahams are very much involved in the middle ground and some of its competitors reduced farm gate prices from 1st February.

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1ppl milk price reduction for suppliers to Medina from 1st March

This reduction results in a March liquid standard litre price of 25.93ppl.

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Arlas Excellent financial results lead to an increased 13th payment

Arlas performance in 2020 was best summarised as Delivering a stable milk price to its owners in an extremely volatile year.  Thursday’s press briefing with Arla was a catalogue of 2020 successes for the European Co-op and at the end of February the Arla BOR will vote on a recommended increased 13th payment of 1.58ppl (1.75-euro cents kg) which if confirmed will increase members pay-out for the year.

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0.5ppl Milk Price Reduction for Suppliers to Paynes Dairies – from 1st February

Ian can’t recall when Paynes were ever a front runner in price reductions, so by default this move for a 1st February cut must be a needs must and predominantly Covid lockdown related. Lockdown has undoubtably been better managed this time but for sure, it hit some middle ground liquid processors harder than others some of whom now have little or no choice.  This reduction reduces producers liquid standard litre milk price to 26.

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1ppl Milk Price Reduction for Suppliers to Pensworth (Liquid) – from 8th February

This reduction is another for which the processor had little if any choice. The lockdown extension to 8th March has hit Pensworth who have seen their trade with schools, universities and food service evaporate compounded by a drop in bulk cream sales. In a letter to its supplying farmers, Pensworth confirm that despite having cut its operating costs including, the regrettable loss of 35 employees, the reduction in its cost base has not offset the significant drop in trade.

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