UP 2ppl from October?
ASDA & Safeway announce this week (beginning 18th Sept) a 2ppl increase on Drinking milk (less than 50% of the market for total milk) with Tesco advising that they expect this rise to come from the market place. Of course supermarkets are not allowed to collude - at least on the face of it when dealing with the OFT.
Does this mean a full 2ppl across all milk? - Maybe
Maybe not - but international prices traded mainly on the $US are firm & have become more so as £:$ gap narrows to $1.40. For those processors mainly on Liquid milk to supermarkets yes - for those processors on cheese - butter ie commodity non drinking products - maybe not 2ppl.
Is this a satisfactory Negotiation Method for milk price? - NO
Absolutely not. Until a fair price regulation method that puts a floor in the market place during currency weakness is instituted above the Intervention Milk Price Equivalent - the better. The US did it for certain states - its called a Dairy Compact.
Milk Price Update August 2000
Milklink in their August announcement have laid down the gauntlet to the Southern producer groups and processing companies. Key in their pricing structure is a volume incentive to the large producer. Further price increases are likely forthcoming despite the weakness of the Euro.
Milklink pricing policy
The example below is for a producer selling 1.5 million L per year ie 200 cows at 7500L
Due to reductions in overheads from August 1st the following changes take place.
|Price projections are as if the August 2000 announcement from Milklink were paid all year the price for Apr - July is therefore misleading if looked upon as an accurate reflection of the 2000 quota year|
|Assumption is 1.5million L average Fat & Protein % on EODC, meeting all quality bonuses|
|Five calving patterns are shown. The producers
current, all year round, and four 6 month spreads with the
majority calved in 3 months around May August, October and December|
|All Year Round||4.11%F|
|Milk Link 00/01||16.0||15.3||16.1||19.5||19.4||17.8||17.4||17.7||17.3||17.2||17.2||17.2||17.4||3.43%P||260,355|
|Dairy Crest 00/01||15.5||15.0||16.2||19.8||20.2||19.4||18.4||17.0||16.6||16.4||16.4||16.5||17.3||EODC||259,063||-1,292|
|Peninsula MP 00/01||15.1||14.2||15.3||18.3||19.8||19.0||17.0||17.3||16.9||16.7||16.6||16.8||16.9||253,589||-6,766|
|Milk Link 00/01||15.5||14.8||16.0||19.6||19.6||18.0||17.6||17.8||17.4||17.2||17.0||17.0||17.7||265,261|
|Dairy Crest 00/01||15.3||14.9||16.1||19.9||20.2||19.4||18.4||17.0||16.6||16.4||16.4||16.4||17.7||266,172||910|
|Peninsula MP 00/01||14.8||13.8||15.2||18.4||19.9||19.1||17.1||17.3||16.9||16.7||16.6||16.6||17.4||260,378||-4,883|
|Milk Link 00/01||16.0||15.2||15.9||19.0||19.0||17.7||17.6||17.9||17.5||17.3||17.3||17.3||17.2||258,065|
|Dairy Crest 00/01||15.5||15.0||16.1||19.7||20.1||19.3||18.4||17.0||16.6||16.4||16.4||16.5||17.0||254,443||-3,622|
|Peninsula MP 00/01||15.1||14.1||15.1||18.0||19.4||18.9||17.1||17.4||17.0||16.8||16.7||16.8||16.7||251,158||-6,907|
|Milk Link 00/01||16.1||15.4||16.1||19.4||19.2||17.3||16.9||17.6||17.5||17.2||17.3||17.4||17.2||257,720|
|Dairy Crest 00/01||15.5||15.0||16.2||19.8||20.2||19.2||18.3||17.0||16.6||16.4||16.4||16.5||16.9||253,132||-4,588|
|Peninsula MP 00/01||15.2||14.2||15.3||18.3||19.6||18.6||16.7||17.2||16.9||16.7||16.7||16.9||16.6||249,397||-8,323|
|Milk Link 00/01||16.1||15.5||16.2||19.5||19.5||17.7||17.2||17.2||16.8||17.0||17.3||17.4||17.2||258,537|
|Dairy Crest 00/01||15.5||15.0||16.2||19.9||20.2||19.4||18.3||16.8||16.5||16.4||16.4||16.5||17.1||256,902||-1,635|
|Peninsula MP 00/01||15.2||14.3||15.4||18.4||19.8||19.0||16.9||16.9||16.5||16.6||16.7||16.9||16.7||250,754||-7,783|