IAN POTTER ASSOCIATES
5th August 2016
Telephone 01335 324594
Website www.ipaquotas.co.uk Email [email protected]
Today
Producers in
E&W
Issue No. 863
Last Week
Change
9,524
9,538
-14
9,538
9,724
1.32
1.31
+0.01
1.29
1.55
1.16
$46.73
18.9 (June)
19.6 (June)
1.42
$49.34
16.7 (July)
21.7 (July)
£:$
£:€
1.18
1.19
-0.01
Crude Oil
$43.94
$43.51
-$0.43
AMPE
23.4 (July)
MCVE
12.5 (July)
(Commodity and currency prices – source ForFarmers)
4 Weeks Ago
1 Year ago
For more information about feed prices and market trends visit www.forfarmers.co.uk or contact ForFarmers DML: 0870 0500306
2ppl milk price increase for Glanbia Cheese suppliers – from 1st September
This takes producers’ standard manufacturing litre to 20.54ppl (www.milkprices.com)
2ppl milk price increase for Arla Direct Suppliers – from August 1st
This takes producers’ standard liquid litre to 18ppl (www.milkprices.com)
1.55ppl plus milk price increase for suppliers to Paynes Dairies Limited – from August 1st
This takes producers’ standard liquid litre price to 19.2ppl ( www.milkprices.com)
The increase comes in two parts with 1ppl on the basic milk price, in addition producers no longer face the balancing
charge deduction, which is equivalent to an additional 0.55ppl so total increase of 1.55ppl. On top of that the promise that
if Paynes ongoing discussions with customers deliver results there could be a further backdated increase on top of the
1ppl. However, the reality is that with Muller holding until at least October 1 st those discussion will be extra challenging.
1ppl milk price increase for suppliers to Dairy Crest Davidstow – from 1st September
This takes producers’ standard manufacturing litre to 22.72ppl (www.milkprices.com)
First Milk milk price increases including 5ppl on B litres
First Milk has increased the price it pays for B litres by 5ppl to 20ppl for August.
In addition, the following A price increases have been announced by the co-op, spread across August and September.
Haverfordwest
Lake District
Scotland
North of England
Midlands
August/September Increase
1.25p
1.25p
0.70p
0.70p
0.50p
1st September Standard Litre
18.74p
17.71p
17.08p
16.90p
16.34p
First Milk are not moving mountains but each and every snippet of news is encouraging for a large group of co op
farmers who just over a year ago feared the Co op would be the next DFOB, Amelca or United Milk.
The B price above the standard litre A price is exactly how A and B should operate with the two ratcheting up and the B
price sending a clear signal to members that more milk is required by First Milk.
It wont be enough for some but it will provide encouragement and optimism for many especially in the full knowledge that
First Milk are no longer paying a milk price they cant afford just to keep up with other milk purchasers as happened under
the previous management.
WMP auction prices jump 10%
Tuesday’s GDT auction saw WMP prices increase by 10% compared to a fortnight ago and the overall average all
products price was up 6.6% to average US$2436, which was significantly more than analysts anticipated.
Key movers were:
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 the 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 Ian Potter personally can accept liability for any errors or omissions. Professional advice must always
be taken before any decision is reached
WMP
Butter
SMP
Cheddar
averaged
averaged
averaged
averaged
US$2265 tonne +9.9%
US$2871 tonne +6.6%
US$1965 tonne +2.1%
US$2889 tonne -0.8%
AMPE & MCVE rocket up
AHDB’s AMPE & MCVE values for July have rocketed up and in one month AMPE has increased by 24% (to 23.4ppl from
18.9ppl) and MCVE is up by 20% (to 23.5ppl from 19.6ppl)
Muller under attack for announcing no price increase before October 1st
This week’s dairy news and chatter has been dominated by Muller’s announcement its non aligned suppliers will not see
any increase until at least October 1st. There was talk of a possible mid September rise, however, Muller have
subsequently ruled this out.
The announcement attracted widespread criticism, particularly from NFU Dairy Board Chairman Michael Oakes who
certainly sharpened his teeth and let go with both barrels in a press release.
His language was unusually strong for an NFU press release but his frustration was understandable.
In the NFU’s release Michael Oakes refers to Muller’s 3ppl retailer premium with a hint that Muller could be using this as a
reason not to increase producer prices in September. He commented:
“Müller’s non-aligned suppliers will no doubt be dumbfounded by Müller’s decision to hold. The decision is an insult to its
suppliers and is completely out of line with recent positive market movements which are bringing some confidence to the
industry at last.
I’m sincerely hoping that Müller isn’t hiding behind the retail supplements paid by Lidl, Aldi and Morrisons, rather than
reacting to the market realities we are seeing in cream incomes, wholesale prices and volume reductions. Cream incomes to a
liquid retailer have increased by a whopping 77% since Müller last increased its base price and current daily deliveries of
milk are down 10.2% on this time last year. This stand on milk price also makes a mockery of the support retailers gave, and
continue to give, dairy farmers in minimum farm gate pricing.”
Similar comments came from Graeme Kilpatrick Chairman of NFUS with:
“I can think of no justifiable reason why Muller has chosen to ignore the market and leave their non-aligned suppliers
languishing with an unsustainable milk price. I sincerely hope that Muller isn’t hiding behind this retailer supplement and
using it as an excuse for not lifting prices now.”
Farmers for Action are equally ignited and protests are on the radar (see below)
The Muller Milk Group Chairman and former board have come under attack with the group collectively described as
impotent as well as Muller messengers rather than negotiators. In addition the fact it doesn’t affect most of the Muller
farmer board because they are on retailer aligned contracts has not gone unnoticed.
Did this group prepare their case for an increase if so why did they agree to the stand on or were they simply told that’s
the position? They claim to represent 1200 plus farmers and will know that Muller have pocketed money on the cream
price alone.
Muller have certainly received additional income, particularly from cream and questions are being asked whether they
have retained it or given part or all of it away to retail customers rather than passing it back to farmers.
To be balanced it has to be remembered that like Arla Muller have paid one price for every litre and not introduced A and
B pricing with which comes the opportunity to create chaos in the liquid market by playing smash and grab with
competitors customers using B milk bought for as little as 6 or 7ppl. Muller have had to defend those predatory prices
and retain customers. In reality they cut prices slower and by smaller amounts than they could have and that’s perhaps
one explanation as to why upward price movements aren’t coming as quickly as some producers desperately need it to.
The move leaves Muller non-aligned farmers on only a 18.66ppl standard litre price and the ex-Dairy Crest producers on
only 18ppl. Note, when Muller do decide to move up on milk prices they will equalise both the Muller Milk Group
(18.66ppl) and Direct Milk (ex-DC 18ppl) milk prices, which is undoubtedly a factor in their equations and decision to hold
producer prices.
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 the 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 Ian Potter personally can accept liability for any errors or omissions. Professional advice must always
be taken before any decision is reached
The NFU’s release concluded with “Müller is throwing its support to the British team at this year’s Olympics and it’s
about time it showed similar support to its non-aligned farmers who deserve improved milk prices.”
All eyes now point towards Arla and whether their member milk price increases for September 1 st. If it does increase by a
useful amount it won’t help Muller in its bid to be both the biggest and best GB milk processor. If Arla don’t move the NFU
will have to sharpen their teeth for the second time in a month.
Farmers for Action go back out on the picket lines this Sunday
Predominantly in response to the Muller stand on price announcement FFA are planning direct action. For details log
onto www.farmersforaction.org latest news.
A demonstration will take place this Sunday 10th at Market Drayton at 8pm according to FFA’s website posting today.
5000 entries from 31 countries means Nantwich the biggest in the world
The Nantwich Cheese Show continues to grow and it is without doubt the biggest cheese show in the world where this
year 5000 cheeses came from 31 countries with 53% of the entries from UK processors.
Champion UK cheese went to Arla Foods’ Taw Valley Creamery Double Gloucester.
The Tesco Red Leicester Trophy was awarded to First Mill’s Haverfordwest Creamery, which is good news given
Haverfordwest’s close relationship with Ornva Foods (AKA Adams) and Tesco. It means Tesco are buying the champion
cheese.
Haverfordwest also won the best Extra Mature Cheddar against a class of almost 100 entries.
2008 1.4 Petrol Manual Mini One in Pepper White with Black Stripes
Good condition inside & out.
Fabric Seats (note, the passenger seat has a tiny hole smaller than a 5 pence piece), Electric Windows, CD Player,
Height Adjustable Driver's Seat & Passenger Seat. Folding Rear Seats. Alloy Wheels, Power Steering, Central Locking,
Alarm Immobiliser, Service History & it had an MOT in early June, hasn’t been used since. Mileage 94,860
In May it had an oil change, new oil, air and pollen filter. I am selling the car because I have had a baby boy, Bobby, and
unfortunately the car is not quite big enough for both me, Bobby and the two British bulldogs. That means Ian is now a
Grandad for the first time!!!
It is a great little reliable car and viewings are more than welcome.
£3,000 ONO
Any questions please email me on [email protected] more pictures are available on request.
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 the 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 Ian Potter personally can accept liability for any errors or omissions. Professional advice must always
be taken before any decision is reached
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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 the 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 Ian Potter personally can accept liability for any errors or omissions. Professional advice must always
be taken before any decision is reached