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.

Spot prices and bulk cream prices ease

According to industry prices guru Steven Bradley (www.milkprices.com) Spot milk prices have eased to 51 to 53ppl last week as did bulk cream prices. In addition the StoneXMilkprices.com UKMFE forward curve price has dipped below the 50ppl marker for the first time in 19 weeks. In addition both MCVE & AMPE indicators have both recorded declines. This is the 6th consecutive weekly run of negative forward curve prices however these negative price movements are without doubt as a result of the summer period.

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Milk production down 2% in June

According to figures collated by AHDB Dairy GB milk production in June fell 2% to 1.047 billion litres.  Cumulatively in the three month period 1st April to 30th June production is down 2% or 59 million litres.

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GDT Auction hits a 9 month low

The most recent GDT Auction (19th July) fell a further 5% to that recorded two weeks earlier making it 8 falls out of the past 9 Auctions and down to a 9 month low not seen since October 2021.   Average prices were down 18% from the record recorded in March of this year and this will impact on New Zealand farmers farmgate payout forecast.   The average Auction price was US $4166 tonne down 5% from the $4360 clocked up on the 5th July.

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First Milk delivers a positive set of Year End Results

In its accounts and Annual report for the year end 31st March 2022 the Co-op has delivered profitable growth in conjunction with its largest capital investment programme as well as an improved balance sheet.   Notable take outs from the report are: Operating profit down 37% to £5.1m, impacted by inflation and speed of recovery Group turnover up 11% to £331m through both volume growth and increased value Net asset value increased by 28% (£10.

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Apologies – Normal bulletin circulation is back on track

There has been an unusually wide gap between this bulletin and the last one.  Normal service is now resumed and as milk processors announce 1st August and 1st September milk price increases between now and 1st August these will be posted on our website (www.ipmsltd.co.uk/dairy-bulletin-news/) and our Facebook page. Immediately after next Tuesdays (2nd August) GDT Auction the results will be posted on our website & Facebook in addition to the circulation of a further email bulletin.

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Tesco cost of production claim proves unpopular

Further to our posting on the 21st re the Tesco COP reducing by 0.32ppl predominantly due to reductions in the cost of feed farmers have failed to find any evidence to support this claim. The fury amongst several farmers with both Promar and Tesco is clear because they can find no evidence to support a reduction in feed prices and neither can Ian.   Some have concluded it is the first warning shot from the retail giant not only to its Tesco producers but also to UK processors and the UK Dairy Industry that Promar/Tesco view the COP as coming down.

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0.32ppl reduction on Tesco COP from 1st August

The reduction has ignited further discontent amongst Muller TSDG producers. Promar have reviewed the COP tracker and the result is the 1st August COP Tesco price reduces by 0.32ppl to 42.59ppl mainly due to a claimed reduction in the cost of feed. There has been unrest between Muller Tesco producers for several months and this will only rattle farmers even more, particualrly in the knowledge that a complete overhaul and review of the Tesco/Promar costing model is well overdue.

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3.08ppl milk price increase for suppliers to Wensleydale Creamery (cheese) – from 1st July PRODUCER NOTIFIED

This increases producers manufacturing standard litre price to 48.47ppl and based on a liquid standard litre to 46.86ppl

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Fixed Price Options – which deals have proved to be bad or possibly disastrous outcomes?

Back on 1st July Muller Direct farmers had the opportunity to enter into a contract for up to 50% of their milk on a 3 year fixed price of 29ppl to supply Lidl. Since then, the retailer has confirmed an additional 11ppl to be paid to those who contracted which to be fair to Lidl is highly commendable. Ian is hearing reports that one or more processors fixed price contracts at 30p and less is not only proving to be a bad outcome for a couple of farmers it is looking like its terminal for their dairy farming business.

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3ppl late milk price increase announcement for suppliers to Long Clawson (cheese)

Back on the 6th June this bulletin highlighted three remaining cheese processors who were yet to declare their 1st July farmgate milk increase. One was Long Clawson who waited until July before  its suppliers were notified of a 3ppl 1st July increase taking producers manufacturing standard litre price to 46.37ppl with what is the final July 1st Farmgate milk price announcement   The Long Clawson  increase is based on  a unique calculation.

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0.75ppl milk price increase for suppliers to Heler (cheese) – from 1st August

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1.7ppl milk price increase for suppliers to Wyke Farms (Cheese) – from 1st August

This increases producers manufacturing standard litre price to 48.69ppl and based on a liquid standard litre 47ppl

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