IAN POTTER ASSOCIATES
18h February 2011
Specialist Agricultural Quota & Entitlement Brokers
Telephone 01335 324594 Fax 01335 324584
Website www.ipaquotas.co.uk Email sales@ipaquotas.co.uk
Today
Clean
AMPE
MCVE
Producers in
E&W
£:$
£:€
Crude Oil
Wheat
Soya meal
Last Week
0.25ppl
29.5ppl
30.35pl
11,005
0.25ppl
29.5ppl
30.35ppl
1.61
1.19
$85
£205
£310
1.60
1.18
$87
£213
£319
Issue No. 610
Change
4 Weeks Ago
1 Year ago
-
0.3ppl
28.10ppl
29.65ppl
11,102
0.35ppl
25.10ppl
28.03ppl
11,502
+0.01
+0.01
-$2
-£8
-£9
1.59
1.18
$89
£197
£320
1.57
1.15
$75
£97
£287
(Commodity and currency prices – source BOCM Pauls)
2ppl Increase for Arla producer from 1st March
The Arla price increase applies to all Arla producers including organic but obviously not Tesco, ASDA or Sainsburys
suppliers (see below) and takes the conventional standard litre price to 26.5ppl
1.4ppl increase to Sainsbury's Arla Farmers from 1st March
This 1.4ppl increase has been added to the 0.6ppl increase paid by Sainsbury's to its Arla suppliers from the 1st
December to equal the 2ppl paid by Arla. This takes their standard litre price to 28.6ppl.
1.5ppl increase to ASDA Arla Farmers from 1st March
This 1.5ppl increase has been added to the 0.5ppl increase paid by ASDA from the 1st October to equal the 2ppl paid by
Arla. However, in making this move the premium paid by ASDA, over and above the Arla standard litre price reduces
from 1.75ppl to 1.25ppl. This takes the ASDA milk price to 27.75ppl, which is closer to the current Tesco price, which will
be reviewed next month. ASDA’s organic standard litre price rises to 34.5ppl.
1.04ppl milk price increase for Joseph Heler Cheese suppliers from 1st March
to 25.04ppl.
- This takes their standard litre price
Auction prices rocket up
This week’s Fonterra world commodity auction produced a strong average of $4,540/tonne for the SMP, WMP and AMF
on offer. This was an increase of 6.9% ($294 tonne) average on the price achieved only 2 weeks ago for the same
products.
The real push came from WMP where prices jumped by $325/tonne (+8.1%) to average $4,320/tonne close to the
auctions high point for WMP on the 2nd July 2008 when $4,395 was recorded.
Fonterra’s CEO believes prices will rise further and has stated that “rising milk prices are the new normal” and that WMP
prices are likely to remain at least 50% higher than their historical averages.
5ppl price increase from Wisemans - This was effective from 13th February to some of Wisemans liquid customers.
So that’s 1ppl for farmers and 4ppl for Wisemans
So at least there is evidence Wisemans are out there pushing through cost recovery charges for both farmer suppliers
and for Wisemans, however, in its letter to customers Wisemans open with the statement:
“It is now almost three years since Robert Wiseman Dairies last requested an increase in the price we charge for our daily
supplies of fresh liquid milk.” Oh dear what an unfortunate admission.
5ppl price increase from Grahams Dairies - Effective from 19th February to all its liquid customers so that’s 1ppl for
farmers and 4ppl for Grahams.
Time for Dairy Crest Direct and the Wiseman Milk Partnership to put their money where their mouths are
Arla Farm Milk Partnership (AFMP) in concluding the 2ppl price increase are almost 3 weeks behind the Dairy Crest
Direct (DCD) and Wiseman Milk Partnership (WMP) decision to accept a 1ppl deferred 1st March price increase which
were announced within a day of each other.
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
However, the AFMP result was certainly worth waiting for and should instantly spur DCD, WMP and others to revisit their
prices following which we can only hope the whole liquid market is driven forward closer to the sort of levels it should be.
Dairy Crest Direct (DCD) were visibly shocked to learn of the Arla move at this week’s NFU Conference and when first
informed thought it was a wind up. Remember back in early January, DCD took the unusual step of publically requesting
a minimum 2.36ppl milk price increase for its non-aligned producers and then settled for a 1ppl deferred increase within a
couple of weeks of the public declaration. Similarly WMP issued a public letter calling for at least a 2.5ppl rise.
WMP took the very easy route of following DCD and settled for a 1ppl increase deferred until 1st March only one day after
the Dairy Crest announcement.
Following this week’s Arla announcement both DCD and WMP have absolutely no excuses for not instantly banging on
the door for more money and neither should simply follow Arla and accept another 1ppl and should show leadership and
push harder for more money. If AFMP and Arla can agree on a 2ppl rise it is the duty of WMP and DCD to push even
harder, instead of once again taking the soft option of following Arla with another 1ppl. You both went public and neither
of you have put the money where your mouths are. It’s time to see who has real negotiating power and who is a puppet to
their processor. Both failed and having gone public with their demands now face criticism for failing to deliver. As
milkprices.com reported it appears (AFMP) have been working harder than others and “conducting themselves quietly
behind the scenes.”
This market needs driving North now. Not on the 1st April to save face and keep the end of year accounts for plc's
healthier but immediately and every single liquid supplier who is contracted to them should be screaming at WMP and
DCD and if that does not work it’s time for FFA to pay a visit. Now is the time for those who claim to represent these dairy
farmers to stand up, be counted and be bold and brave, if those charged with negotiating, miss the opportunity and can't
deliver they must be replaced now.
Stop Press – Mirror, Mirror on the wall whose the weakest board of all?
WMP meet Wisemans on Monday 21st.
DCD meet Dairy Crest on Tuesday 22nd.
After these two meeting we will know who leads and who follows. The good news is they will have ample time to inform
the press of their success in negotiating a further 1st March producer price increase.
Nocton plans for a 3,770 dairy unit withdrawn
Nocton Dairies ambitious plan to build a Greenfield dairy unit for 3,770 cows in Lincolnshire has been withdrawn as a
direct result of the Environment Agency objections to the proposal.
This will be a disappointment to the majority of people involved in the dairy industry and there can be little doubt that other
similar planning applications from either the people behind the Nocton scheme or other confident dairy farmers will
surface during the next 2 years or so in Great Britain.
Hopefully, next time round the lessons of Nocton will have been learned and equally important the wider general public
will be better informed of the technologically advances that both dairying and agriculture need to embrace and adopt if
they are to become competitive in future. GB dairy farming’s future will have a place for lots of different dairy systems,
large and small, organic and intensive.
Let’s hope that next time round it’s the second mouse that gets the cheese.
Farmers Guardian take on Nocton withdrawal is jaw-dropping
Ian is bewildered as to how the Farmers Guardian came up with today’s front page headline of “Super Dairy plans
scrapped as Nocton bows to pressure” which is a headline more akin to the Daily Mail than a core livestock farming
paper. Ian has a copy of the email from the Environment Agency’s objections to Kesteven planning department of 15 th
February 15.24 and to go to planning facing the EA’s objections would be like pushing water uphill.
Oh and sorry Farmers Guardian but on page 6 your heading is “Industry views on Nocton decision”. You then proceed to
give the view of 5 organisations viz: Compassion in World Farming, Viva, Campaign to Protect Rural England, The
Environment Agency and The Soil Association.
Are we to believe these 5 maverick and uniformed organisations are the dairy industry? Ian had assumed the RABDF,
Dairy Co, Dairy UK, NFU’s, BCVA and all others were the industry.
Has the Farmers Guardian swallowed the uninformed, malicious and deeply damaging hype from these. It’s a disgrace.
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
Name and Shame your Milk buyer
This is a new feature, which will appear each week with a rolling list of milk buyers who fail to increase farm gate milk
prices.
Please email us if your milk buyer has not handed over any price increase in 2011 with details of their trading name,
location and products produced. At the point they pay a sensible increase to farmers they will be removed form this list
and the increase will feature on this bulletin.
If, in Ian's opinion, they offer an insulting non market related increase they will remain on the list for dragging their feet.
If buyers wish to communicate any reasons for not paying over any money and why their name should be removed from
the list they are welcome to email us.
As DIN points out “virtually all UK milk purchasers have now increased their milk prices in 2011 by an average of about
1ppl. Are these firms the only exception?”
This week’s name and shame starter is:
Jacksons Dairies Ltd, Hazelgrove, Stockport - liquid processor
Note, Medina and Freshways pay a basket price so price increases from them are automatic and not actually announced.
Meadow Foods out hunting for new suppliers
Meadow Foods have mounted a selective producer recruitment campaign in South Wales to take their annual
requirements close to 500 million litres from its current 420 million.
Middle ground is still the problem
Forget shooting the big 4 retailers and indeed the co-op because the problem is the middle ground liquid market.
Unless Iceland, Farmfoods and all other discounters and middle ground buyers recognise the need to pay more for their
liquid milk supplies we can all kiss goodbye to a second bite of the cherry and further farm gate increases.
Only two ways to know if they are paying more for their milk.
1.
2.
They increase the price on their current £1 for 4 pints promotion.
FFA pay a visit and get them to confirm in writing when they started to pay an increase and how much.
This sounds easy but I assure you its not and requires some tough talking from some brave boys and girls. It’s not a job
for the tea and biscuits boys.
Hanover Dairies and Dairy Crest deal is baffling
Back on the 17th December we exposed the story that Dairy Crest has concluded a 2-year fixed price deal to supply
around 320,000 litres of liquid milk to north east dairy operation, Hanover Dairies Limited.
Apart from the fact the milk is now hauled from Liverpool to the north east, Hanover have recently declared their sale
price as 95p per litre or £1.89 for 2 litres of DC’s milk. What’s baffling those who are competing is what was DC’s logic in
wading in with a very low priced 2-year deal with a company who certainly cannot be accused of under-selling the market
and indeed have very good margins. It seems so unnecessary.
21 Dairy farmers face prosecution
Unfortunately 21 dairy farmers, including NFU Vice President Gwyn Jones, face a court hearing on March 15 th for
employing unlicensed illegal migrant workers from Marden Management based in Wiltshire and run by Chris Blakeney.
The GLA certainly appears to be taking a particularly heavy handed approach with some of the dairy farmers caught up in
the mess but perhaps that’s more to do with them attempting to justify their existence in case the GLA ends up on the
governments bonfire.
However the stakes are high. Baroness Scotland, the countrys most senior law office who fought hard to save her career
having accidentally employed an illegal housekeeper. The law states “those who unknowingly employ illegal migrants
through less than diligent recruitment and employment practices can face severe penalties of up to £10,000 per worker”.
NFU Conference
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
Another prestigious gathering of the great and the good. President Peter Kendall had his gun loaded with plenty of dairy
industry bullets and Secretary of State, Caroline Spellman confessed that “the market for milk here (in GB) is not working”
and that “the plight of dairy farmers keeps me awake at night.”
The dairy breakout session saw a departure from the traditional review of what the almost invisible NFU Dairy Board has
achieved in the past 12 months in favour of a panel discussion.
The debate unfortunately drifted into a Jim Begg (Dairy UK) baiting session and at one stage just one wrong word from
Jim would have blown the roof top off the Hilton Hotel and he sensed it and retreated into defence.
It’s a pity this continued for the majority of the 90 minutes because what was needed was some inspirational solutions
and creative original thinking to sort out the mess but unfortunately there wasn’t any. The topic was “Dairying for the next
decade” and only Kites John Allen really offered comments pertinent to the debates title.
PRICE WATCH
£1.60 x 4.4litres = 36ppl Farmfoods, Forfar, Angus
INTERNATIONAL MILK PRICE WATCH
Carrefour Supermarket – France
Whole Milk
1.18 €pl = 99 ppl
Purefilter Milk 1.48 €pl = £1.24 litre
Organic Milk
1.74 €pl = £1.45 litre
Thanks to an eagle eyed Kite Consultant for this juicy snippet
Waitrose join liquid milk discounting
Clearly feeling the pressure from the ASDA fuelled campaign to offer liquid milk at £1.25 for 4 litres this week Waitrose
has slashed its price to fall into line with ASDA, Tesco, Sainsburys and Morrisons.
WANTED
50 Spring Calving Organic Crossbred cows, calving between now and May. Please contact Simon on 07730557611 or
Email simonleverett@hotmail.co.uk
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