Only one fixed price deal has proved to be a bad and outcome for some disastrous
Posted on: 12/08/22
Back on the 12th July this bulletin requested details of fixed price contracts with a bad outcome.
The only fixed price deal which prompted a response and has clearly resulted in a very bad outcome is the 1 year one offered by Yew Tree Dairy at 29ppl based on a liquid standard litre which started on the 1st January 2022 and is backed off by Yew Tree to a Dutch buyer.
From the 13 producers who took the time to email Ian its clear some claim that it is crippling them to the point they believe it will end their dairy business. This does not look like scaremongering with some confirming they fixed 2/3rds of their 2022 output at 29ppl.
One respondent who confesses “It was our own bad business decision” also commented that “Had the market price gone the other way, would producers have paid money back to the processors? (I don’t think so).”
Another affected producer pointed out that for Yew Tree it was a bad outcome because they are loosing out due to fixing their haulage and manufacturing costs at pre inflationary prices.
The real kick in the teeth would be if these producers who hang in completely miss out on the 48p plus prices on this literage in 2023 once the deal ends..