January 2002 Update
are two tables
Other Day Collection
tables were produced prior to
Milk Links price cut
of 0.5ppl announced 13th December effective 1st December
and any announcement made thereafter.
further announcements in Dec / Jan
This approach is judged by the author as the fairest comparison prior to a
slide in prices. The situation will be reviewed again in April.
Please read all the notes carefully.
a summer of improving prices the situation has been turned on its head with both
Peninsula and Milk Link cutting prices and Diary Crest / Unigate surprisingly
holding until April 2002. The
main features of the market situation are:
Competition amongst processors
to maintain / increase market share
shortage of Milk:
production in the UK is up 100 million L on last year - a good forage year
negated F&M effect and the usual response by producers to a situation
hitherto of good milk price and low (realistic) quota costs.
International Commodity Prices
£ vs. € - UK Gov itself published a £40 change in margin for every 5%
change in the exchange rate
Notes to Table
quality Bonus paid 3,000,000 2,000,000 &
1,000,000 L collections on high or moderate constituent qualities.
Patterns are all year round or 6 month spread with 66% in first 3 months.
Price is that projected for 12 months and is not a month by month price
There is no cost of leaving but there is a 12-month binding notice.
The Unigate D.Crest group has approx 50% of its production in Liquid the
remaining in manufactures.
Unigate' s seasonality and summer milk or level bonuses to be maintained from 1st
April 2002 for their original contract but not for their manufactures contract
- a joining levy for 3 Years of 0.2ppl has been deducted.
Members voted overwhelmingly to change structure and proceed with 5ppl
max guarantee to back industry financing of processing ventures.
From the 13th payment - ie profit of the business normally distributed in
July, a proportion can go into the general reserve and a proportion into members
loan accounts available for withdrawal upon leaving.
MilkLink has now got the farmer approval it requested and can proceed to
full vertical integration. But what
to buy or with whom to joint venture.
- A 0.5ppl new members levy payable for 3 years (1.5ppl) has not been
deducted. If not an existing member
having weathered a 3-year joining phase deduct 0.5ppl from the prices quoted.
announcements are for 3 months only and are projected forward as if for a full
12 months. This being the fairest way to assess potential prospects for price
over 1 year.