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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.}

02/04/20

Dairy prices in freefall with spot milk at 15ppl plentiful and falling like a stone

In this bulletin dated 13th March, Ian stated – Coronavirus is causing a melt down and if the government introduces restrictions the dairy trade is buckling for a very rough ride with some expecting spot milk to be plentiful and quickly down to circa 20p as orders are reduced or cancelled on mass. Well it has spectacularly crashed to 15p and falling. There is suddenly oceans of surplus milk desperately trying to find a home.

02/04/20

What does this all mean for milk prices?

With cream prices having dropped from 1.35 to £1 in under three weeks, liquid processors are under pressure. It’s serious, and don’t shoot the messenger but unless a processor has connections with Ian’s relation, Harry Potter, holding liquid non-aligned farmgate prices at current levels will be close to mission impossible as more milk is forced into commodity markets and with our driers at full stretch distress milk has returned big time.

02/04/20

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

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

02/04/20

First Milk (Cheese) Stand on - hold its member milk price until at least 1st June

This is an excellent result for which First Milk and its partner in cheese, Ornua (formerly Adams) should be applauded, particularly for the stability it delivers. This maintains members manufacturing standard litre milk price at 27.63ppl and based on a liquid standard litre 26.75ppl.

25/03/20

Arla’s member April Milk Price to remain at 30.79ppl

Arla have announced a stand on April 1st member milk price on both conventional and organic supplies with a small 0.15ppl quarterly currency adjustment. The resulting manufacturing standard litre price is 30.79ppl (39.83ppl organic) and based on a liquid standard litre 29.61ppl (38.3ppl organic).

25/03/20

2ppl second bombshell price cut from Meadow Foods

A group of Meadow Foods suppliers in South Wales have been informed that they join Meadows Cumbrian farmers in taking a 2ppl price cut from 1st April. The resulting liquid standard litre price is 24ppl whilst those Meadow Suppliers closer to its Chester HQ remain on 26ppl. A number of Meadow farmers hit with the reduction feel that they have been unfairly victimised and have concluded that whilst Meadow want to hold them to 12 months’ notice, the reality is they are no longer wanted and need to either find new homes for their milk or exit the industry.

25/03/20

2ppl bombshell price cut for Freshways suppliers

In my 13th March edition I wrote: Coronavirus is causing a melt down and if the government introduces restrictions the dairy trade is buckling for a very rough ride with some expecting spot milk to be plentiful and quickly down to circa 20p as orders are reduced or cancelled on mass. The problem is primarily in London where the food service industry is gradually grinding to almost a shut down and if schools and universities close it will be close to meltdown especially in coffee shops (people working from home won’t visit coffee shops) and restaurants.

25/03/20

Chinese demand for Dairy is on the up

According to the latest Rabobank analysis, Chinese demand for imported dairy products is “bouncing back” as new cases and deaths continue to decline daily. Yesterday reduced to 4, and new confirmed cases down to 47. Rabobank predict Chinese consumers dairy buying habits will return to “normal” in the second half of this year. However, the seismic drop in global tourism has been a huge blow to Asia’s food service industry which is unlikely to recover in 2020 and will leave the global dairy industry with a severe hangover.

25/03/20

First Milks First 4 Milk Pledge

First Milk is the latest milk processor to set its own assurance standards covering people, animals and the planet. Areas covered include a reduction in antibiotic use and a minimum grazing of 120 days and 6 hours each day for each animal as well as a guarantee that no healthy animal (including any calves) will be on farm euthanized. First Milk have been working on the pledge for several months having recognised consumers key concerns and the direction of travel the dairy industry needs to take.

25/03/20

For a brief summary of the impact of Coronavirus (COVID-19) on dairy markets, click on the AHDB link below

https://ahdb.org.uk/news/coronavirus-impact-on-dairy-and-livestock-markets

13/03/20

2ppl Bombshell price drop from Meadow Foods

Cumbrian suppliers to Meadow Foods were delivered a huge blow late last week with the announcement that Meadow were to cut their milk price by 2ppl from April 1st resulting in a relegation/bottom of the table standard litre price of 24ppl. Umpteen furious Meadow farmers emailed Ian having been informed that Meadow have had to make the cut due to reduced demand by Arla of 150 Million litres which means Meadow were brokering 30% of their milk (Circa 500 Million Litres) to Arla.

13/03/20

0.5ppl Milk Price increase for Paynes Dairies (Liquid) suppliers – from 1st of March

This increase came as a surprise and part or all must surely be coming out of Paynes piggy bank as opposed to price increases achieved with customers from March 1st. Credit to Paynes for announcing it which takes their standard liquid litre price to 26.2ppl.