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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.}

09/02/21

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.

09/02/21

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.

09/02/21

0.5ppl to a Maximum of 1ppl Milk Price Reduction for Suppliers to Freshways – from March 1st

Notice of a price reduction to farmers to the tune of a voluntary code compliant calendar month has been given by Freshways but clearly the lockdown situation and milk market trade consequences are moving too quickly for Freshways to be able to confirm the exact reduction until a week or so before the month end. Freshways current liquid standard litre price for February is 27ppl.

09/02/21

Crediton Dairy (Liquid) to Stand On until at least 1st April

This maintains producers liquid standard litre price at 28.50ppl.

09/02/21

First Milk Member Milk Price to Stand On until at least 1st April

This maintains producers manufacturing standard litre price at 28.93ppl and based on a liquid standard litre the price holds at 28ppl. For its Haverfordwest Creamery Tesco Cheese Group First Milks manufacturing standard litre price holds at 30.43ppl. First Milk previously confirmed the 0.5ppl member premium will continue for the milk year commencing 1st April 2021.

09/02/21

Saputo (AKA Dairy Crest) to Stand On until at least 1st April

This declaration is based on the minimum floor price agreed with DCD for the first quarter of 2021 at a manufacturing standard litre price of 29.15ppl and based on a liquid standard litre 28.11ppl.

09/02/21

Barbers (Cheese) to Stand On until at least 1st April

This maintains producers manufacturing standard litre price at 29.83ppl and based on a liquid standard litre 28.79ppl.

09/02/21

Belton Farm (Cheese) to Stand On until at least 1st April

This maintains producers manufacturing standard litre price at 28ppl and based on a liquid standard litre 27.25ppl.

09/02/21

GDT Auction Records 7 Year Record Average

Tuesdays GDT Auction rose a further 1.8% hot on the heels of an impressive 4.8% only two weeks ago and continues a run of 9 increases from the past 10 Auctions since 1st September 2020 covering a 5 month period. Which has seen the all products price/index rise by 21%. The surge in demand is driven by strong demand from China and South East Asia. This run of significant rises in the GDT Auction results has resulted in Fonterra revising its farmgate milk price forecast up by 20 cents kg to a range of $6.

09/02/21

Average UK Milk Price 30.38ppl for December

DEFRA’s provisional farmgate milk price for December supplies calculates at 30.38ppl up 3.3% on the December 2019 figure. The average 2020 farmgate milk price weighs in at 28.6ppl for the 12 month calendar period, almost the same as the 2019 average. Note these figures are the average paid out to farmers and not a standard litre figure. Meanwhile UK milk production for December was up 2.

09/02/21

Markets

Spot milk is trading at 25 to 26ppl delivered to factory so roughly worth 23 to 24ppl ex farm for the surplus.

09/02/21

Mandatory Code of Conduct to be drawn up by Government

The outcome of the various NFU’s requests and campaigns to government for legislation on milk contracts, with the aim that it will address the perceived imbalance in power currently in favour of processors at the expense of dairy farmers, is that the current voluntary code will be ditched in favour of a mandatory code. All four regions will now have a huge task to develop a workable code and set of minimum standards but for sure for the farmers supplying one or two processors who continue to back date price cuts, its either time to do what’s right or shut up shop.