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MILKprices

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. e 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. at 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 e ect? 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. e company also rea rmed 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, a er 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.

Milk price analyst Stephen Bradley on the latest milk industry developments.

Muller increases a penny from November

JMuller has increased both its conventional and organic Direct milk price by 1ppl from November.

The increase follows the company’s 0.75ppl increase from July this year (making 2.75ppl increase for the year to date) and takes our liquid standard litre up to 30ppl.

Base price

This price includes the 1ppl 13th payment (paid in January 2022 on those litres which attract the discretionary base price only) for those producers who meet the conditions for the Muller Advantage programme.

The company’s Direct organic milk price for our liquid standard litre also increases by 1ppl to 41.5ppl for those Direct organic suppliers who satisfy the conditions of the Muller Direct premium.

Meadow Foods is also to increase its A litre milk price to all suppliers by 1ppl from November.

The flat rate increase follows the 0.75ppl increase from July (taking the total increase for the year to date to 3ppl) and takes the company’s A price for our liquid standard litre up to 30ppl.

Flat rate

Being a flat rate increase, our manufacturing standard litre also increases by 1ppl to 30.63ppl across all of the company’s pooled regions.

Paynes Dairies to pay 30ppl from November

JFor the second time this year, Charles Payne has confirmed he is to put in back to back monthly milk price increases, with producers receiving an additional 1ppl increase from October and a further 0.5ppl from November.

The increases follow the back to back increases of 1.5ppl from June and 0.5ppl from July and takes our liquid standard litre up to 29.5ppl for October and to 30ppl from November.

*Our liquid standard litre is 4% butterfat and 3.3% protein, for our manufacturing 4.2% butterfat and 3.4% protein and, in both cases, Bactoscans of 30,000/ml and SCCs of 200,000/ml, with Thermodurics of 500/ml, 1m litres/year on EODC (max vehicle accessibility) but before B pricing, balancing, profile adjustments from level supply, seasonality, monthly profile payments, capital deductions or annual/part annual growth incentive schemes or supplements not directly linked to dairy market price movement.

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Latest milk prices from

Jun’21 Jul’21 12mth Diff Latest 4.0/3.3 4.0/3.3 Ave Jul’21 Confirmed Before Before Aug’20 v Milk Seas’lty Seas’lty Jul’21 Jun’21 Price

LIQUID PRICES (4% b/f & 3.3% prot) Müller Milk Group – M&S ∞ Müller Milk Group – Waitrose Müller Milk Group – Tesco Müller Milk Group – Sainsbury’s Arla Foods – Sainsbury’s Arla Foods – Tesco UK Arla Farmers – Tesco (i) (ii) (iii) (i) v (ii) (iv) 33.11 34.70 32.87 1.59 35.90 33.35 33.35 32.60 N/C 34.35 32.13 32.13 31.43 N/C 33.36 31.80 32.69 31.32 0.89 32.87 31.68 32.57 31.20 0.89 32.75 31.88 31.88 31.18 N/C 33.11 33.40 33.37 31.06 -0.03 32.81

UK Arla Farmers – Morrisons (Grazing)

33.19 33.16 30.85 -0.03 32.60 UK Arla Farmers – Morrisons 32.96 32.93 30.62 -0.03 32.37 Müller Milk Group – The Co-op Dairy Group 30.39 30.39 29.87 N/C 32.08 UK Arla Farmers 31.98 31.95 29.64 -0.03 31.39 Dale Farm NI 30.84 30.84 29.07 N/C 31.09 Crediton Dairy 30.00 30.00 28.71 N/C 30.50 Dale Farm GB (Kendal) 29.14 29.64 27.72 0.50 29.64 Blackmore Vale Dairy 29.15 29.80 27.71 0.65 29.80 Yew Tree Dairy 29.10 29.10 27.38 N/C 30.50 Müller Milk Group – Müller Direct 28.25 29.00 27.23 0.75 30.00 Meadow Foods 28.25 29.00 27.02 0.75 30.00 Meadow Foods Lakes 28.25 29.00 27.02 0.75 30.00 Müller Milk Group – Müller Direct (Scotland) 28.04 28.79 27.00 0.75 29.79 Grahams Dairies 28.00 29.00 26.92 1.00 29.00 Paynes Farms Dairies 28.00 28.50 26.79 0.50 30.00 Freshways 26.00 28.50 26.54 2.50 30.00 Braeforge 25.00 28.00 25.69 3.00 28.50 Simple Average 30.16 30.76 29.06 0.60 Simple Average (excl. retail contracts) 28.57 29.37 27.46 0.79

MANUFACTURING PRICES (4.2% b/f & 3.4% prot) UK Arla Farmers

33.23 33.20 30.79 -0.03 32.63 Parkham Farms Tesco 31.63 32.25 30.57 0.62 32.38 First Milk – Haverfordwest Tesco Cheese Group 31.43 32.00 30.41 0.57 32.50 The Fresh Milk Company – Level Profile ‡ 30.78 31.30 29.52 0.52 31.55 Barber’s Cheesemakers 29.83 30.86 29.49 1.03 31.89 Saputo Dairy UK – Davidstow 30.65 30.65 29.40 N/C 31.15 Wyke Farms 30.05 30.85 29.08 0.80 31.89 The Fresh Milk Company (Lactalis) 30.21 30.73 28.95 0.52 30.98 First Milk 29.93 30.50 28.91 0.57 31.00 South Caernarfon 29.85 30.60 28.79 0.75 30.60 Wensleydale Dairy Products 29.45 29.95 28.51 0.50 30.42 Belton Farm 29.30 30.05 27.99 0.75 30.05 Glanbia – Llangefni (Constituent) 29.00 29.00 27.91 N/C 30.00 Arla Foods – Direct Manufacturing 28.37 28.37 27.53 N/C 28.37 Simple Average 30.26 30.74 29.13 0.47 Simple Average (excl. retail contracts) 30.05 30.50 28.91 0.45

‘B’ Price Indicators StoneXMilkprices.com UKMFE (gross) *StoneXMilkprices.com UKMFE (net) **Delivered spot milk (net to the producer) 33.88 32.11 30.75 -1.77 30.18 28.50 27.22 -1.68 21.76 29.85 8.09

Notes to table

Prices for both Liquid & Manufacturing tables paid for a producer sending 1mltrs/yr on EODC (max vehicle size accessibility) with Bactoscans of 30,000/ml and SCC’s of 200,000/ml with Thermodurics of 500/ml. Prices exclude capital retentions or AHDB levies, profile adjustments from level supply, seasonality, balancing and A&B price schemes. Excludes annual / part annual growth incentive schemes or supplements not directly linked to dairy market price movement. Liquid price for milk contains 4% b/f and 3.3% protein. Manufacturing price for milk containing 4.2%/b/f and 3.4% prot. All prices for non-aligned prices are before monthly retail supplements. (i) Jun’21 prices before seasonality or B pricing (ii) Jul’21 prices before seasonality or B pricing (iii) Table ranked on simple rolling 12mth average of monthly prices (Aug’20 to Jul’21). (i) v (ii) The difference Jul’21 compared with Jun’21. UK Arla Farmers 0.43ppl increase from Jun ‘21 includes forecast 13th payment holding on +0.851ppkg (+0.868ppl) based on our liquid std litre. UK Arla Farmers 0.44ppl increase from Jun’21 includes forecast 13th payment holding on +0.884ppkg (+0.902ppl) based on our manufacturing std litre. UK Arla Farmers 0.03ppl decrease from Jul ‘21 includes forecast 13th payment decreasing 0.02ppkg to +0.849ppkg (+0.874ppl) based on our liquid std litre. UK Arla Farmers 0.03ppl decrease from Jul’21 includes forecast 13th payment decreasing 0.02ppkg to +0.882ppkg (+0.908ppl) based on our manufacturing std litre. Crediton Dairy price includes FarmMetrics Scheme Bonus of 0.5ppl (paid monthly) and 0.5ppl 13th payment (commencing Apr’21 paid Jan’22). First Milk price includes 0.5ppl Member Premium accrued as a 13th payment paid Apr’22. First Milk Haverfordwest Tesco Cheese Group includes 2ppl retailer premium averaged as 1.5ppl based on seasonal profile. Fresh Milk Company price before Morrisons monthly cheese supplement (No payments Jun’21 or Jul’21 statements). MMG Direct price includes 1ppl Müller Advantage Premium paid annually in arrears to Direct/Organic farms meeting specific Müller Direct criteria. South Caernarfon price includes flat 0.6ppl annual member bonus. •• Milk buyers whose prices were severely impacted through the 2020/21 Covid-19 lockdown crises. •• Yew Tree Dairy 76/24 split disbanded from Jun’21 alongside 2ppl increase. ‡ Price includes 12mth average rolling profile fixed at 0.57ppl. * UK Milk Futures Equivalent (UKMFE) net to producer includes 5% processor margin and allowing 2ppl ex-farm haulage + milk testing. ** Ave delivered spot milk net to producer allows 2.5ppl covering haulage + milk testing and margin. (iv) Latest confirmed milk price at the time of going to press. N/C in this context means no change made aware since Jul’21. Braeforge price from Aug’21 includes 1ppl for participating in the Compassion World FarmingUK Arla Farmers 0.87ppl decrease from Sept ‘21 includes forecast 13th payment unchanged +0.849ppkg (+0.874ppl) based on our liquid std litre. UK Arla Farmers 0.9ppl decrease from Sept’21 includes forecast 13th payment unchanged +0.882ppkg (+0.908ppl) based on our manufacturing std litre. UK Arla Farmers 0.31ppl increase from Oct ‘21 includes forecast 13th payment decreasing 0.006ppkg to +0.843ppkg (+0.868ppl) based on our liquid std litre. UK Arla Farmers 0.32ppl increase from Oct’21 includes forecast 13th payment decreasing 0.006ppkg to +0.876ppkg (+0.902ppl) based on our manufacturing std litre. The Fresh Milk Company 0.25ppl price increase from Jul’21 to 30.73ppl for our manufacturing standard litre also acts as guaranteed minimum price to the end of Sept’21. Freshways 1.5ppl increase to 30ppl from Oct’21 guaranteed as a price minimum until the end of Mar’22. MMG Direct price includes 1ppl Premium from Jan’20 paid annually in arrears to Direct/Organic farms meeting specific Müller Direct criteria. All prices (excluding First Milk Haverfordwest Tesco at 1.50ppl) are before monthly retail supplements. Milkprices.com cannot take any responsibility for losses arising. Copyright: Milkprices.com