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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.}

31/01/20

Arla continues with a 14 month stand on milk price – until 1st March

Its another fantastic result for the European giant and means producers prices for conventional and organic milk will be held at current levels until at least 1st March. The conventional manufacturing standard litre price remains at 30.04ppl and based on a standard liquid litre holds at 28.89ppl. Arla’s member organic milk price also remains unchanged at 40.

31/01/20

Barbers (cheese) stand on for a 5th consecutive month - until 1st April

This maintains Barbers standard manufacturing litre price at 27.79ppl and based on a liquid standard litre at 26.8ppl. Barbers producers excess litres, AKA B price, is confirmed at a healthy 29.43ppl for January suppliers.

31/01/20

0.5ppl milk price reduction for suppliers to Saputo (AKA Dairy Crest Davidstow) from 1st March

Whilst this price reduction is unwelcome it has to be put into context as to where it sits and its history. Firstly, DCD and Saputo have agreed the new 1st March 2020 standard manufacturing litre price of 28.7ppl is a minimum four-month floor price until 1st July 2020. This is a welcome move and provides stability during the Spring flush in terms of it can only be this price or better.

31/01/20

Market Update

Spot milk prices are still holding at 27p to 28p with regular reports that Freshways are the main regular buyers of spot milk and are short on volume. A key challenge for liquid processors who are paying a liquid standard litre price at the top end is balancing the books at current cream prices. According to AHD Dairy the January 2019 bulk cream price was £1710 and one year later was down to £1300 representing a 24% fall.

31/01/20

Glanbia (cheese) stand on - hold its price until at least 1st March

This maintains a manufacturing standard litre price at 27ppl and based on a liquid standard litre 26.1ppl.

21/01/20

GDT average up another 1.7%

Hot on the heels of the 7th January 2.8% jump comes todays 1.7% lift to average US $3434 tonne, for 33,050 tonnes sold (33,165 sold 7th January). The number of active bidders continues to rise this time to 191. Butter + 5.5% to average US $4,250 tonne WMP + 2.4% to average US $3,233 tonne SMP + 0.7% to average US $3,036 tonne Cheddar + 0.6% to average US $4,048 tonne All of the above average prices are well over the 17th December 2019 Auction results when prices surprisingly crashed back by 5.

21/01/20

0.5ppl Milk Price reduction for First Milk Members from 1st of February

This takes producers standard manufacturing litre to 27.38ppl and based on a standard liquid litre to 26.5ppl.

21/01/20

Pattemores Dairy (Liquid) price hold until 1st of March

This maintains producer’s standard liquid litre price at 26.25ppl and based on a manufacturing standard litre at 27.12ppl.

21/01/20

0.5ppl Milk Price increase for suppliers to Meadow Foods – from 1st of February

It’s presumably pure co-incidence that at the same time as Meadows March 2019 profits were announced (see below) the company announced 0.5ppl farmgate milk price increase from 1st February. Meadow were the only large processor to drop its liquid standard litre price to 25ppl from 1st of September with an eye watering 1.75ppl drop which has lasted for 5 months and well below all other major GB milk processors farmgate milk prices.

21/01/20

32ppl for Spot Milk but now softening

Spot sales have been running at 32ppl for most of January but now appear to be softening and this week have dropped under 30ppl between 27 to 29ppl. The spot trade is very volatile but does give us a feeling of the market temperature. Supplies were reported as slightly short of demand earlier this month hence the high spot price for a couple of weeks.

21/01/20

Healthy £25.6m pre tax profit for Meadow Foods

Meadow Foods 31st March 2019 pre tax profits have weighed in at a very healthy £25.6 million which should delight its private equity group owners. On an estimated milk throughput of circa 500 million litres this profit represents a healthy 4.65ppl significantly more than a large chunk of Meadow farmer suppliers earnt.

21/01/20

DEFRA’s math’s is called into question for a second consecutive month

Defra has declared its November 2019 average farmgate milk price at 29.69ppl an increase of 0.3ppl on the October average (29.35ppl). Admittedly the months fat and protein numbers were up but this increase comes in a month when processor prices either fell or stood on. It has to be noted the 29.69ppl is not a standard litre price and with November milk quality averaging 4.