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74 DF Nov p74 75 76 Milk KJ MB.indd 2
MILK prices Freshways price rise sets the pace JTempting fate is never wise at the best of times, although sometimes there is just the feeling that something needs to happen. So what of the milk price developments in the last month? Our reference on this page in the previous issue to the potential milk price moves this autumn being likely to mirror the smallest of ripples in a mill pond was at the time absolutely spot on. At best, there was about 20% chance of any milk buyer outside the major retailers being prepared to step up and help push milk prices on again as we head towards winter. The farmer pleas across the country to push up milk prices to help with cost increases on-farm were more or less becoming lost in the wave of cost increases facing the processor on virtually every form of input. The situation is being described by some as simply insane. Indeed, many were breathing a sigh of relief that Arla had actually pulled back its milk price for September. Milk price holds for both liquid and cheese for October/November were almost a forgone conclusion. That was until September 24, when Freshways uncharacteristically decided to rock up to the water’s edge with its front end loader and drop in a boulder. Ripple effect? More like a tsunami the way it caught most in the industry by surprise, not just the size of the rock (scale of the price increase), but also the company responsible for the action. As if Freshways’ out-of-the-blue announcement to increase its A litre
milk price by 1.5ppl from October 1, taking our liquid standard* up to 30ppl, was not enough to turn heads, then the company guaranteeing this price would act as a minimum for the six months to the end of March next year most certainly raised eyebrows. The company also reaffirmed its B litre pledge announced back in early July that any litres produced above an individual’s A litre allocation through to the end of December this year will not receive less than 28.5ppl, after which it will be reviewed for the new year. Milk supply It is a well-known fact through industry circles that the company is short on milk supply and, even by its own acknowledgement, it is about to embark on a producer recruitment drive for additional direct volumes. At the same time, existing suppliers who wish to increase their A litre allocation are now being invited to submit a request into the company. Some would argue the company’s actions smack of desperation as being so short of ex-farm milk. However, the fact is, the company’s actions will have helped put hundreds of thousands of additional pounds into producers’ bank accounts around the country over the next couple of months. Extra money which might have otherwise not have been a certainty, but it is much needed to help with soaring on-farm costs this winter.
NOVEMBER 2021 15/10/2021 09:56
