straighttalk first milk membersâ€™ newsletter
New Chairman Introduced at AGM Conference
also in this issue: Interview with Bill Mustoe AGM Conference & Dinner Improving Herd Health Pilot is launched
Issue 104 NOVEMBER 2009
Fast Start From Mustoe
StraightTalk is printed on 100% recycled paper
Our new chairman, Bill Mustoe officially joined the business at our AGM Conference on 29 October. StraightTalk caught up with him to find out about his diverse background and what his priorities are for the business. Bill Mustoe knows how to run a business. He has spent forty years in the consumer foods industry in a range of executive roles. He has started companies up from scratch and worked for big organisations like Procter and Gamble. He has managed companies in the UK, France, Holland, Germany and Belgium. In his own words, he has a “passion for business” and simply explains the objectives of any consumer business: “You have to get the right products to the consumer; you must deliver the best service to your customers; you must ensure that you have the lowest possible cost of production; and finally you must constantly invest and innovate.” In addition to First Milk, he works with three other businesses. He is a Regional chairman for Yorkshire Bank, which is part of National Australia Bank; one of few AA rated banks in world. Due to the conservative approach that the bank takes, it has not been touched to the same degree
as other high street banks by the global financial crisis. He is chairman of Frank Roberts & Sons, a family-owned bread business based in Cheshire that produces 1.5 million loaves each week. The company supplies all the major retailers for their Cheshire and the Midlands stores. It also supplies the food service sector with bread to sandwich makers nationwide. He is chairman of Scarborough Cricket Club. The club hosts the oldest first class cricket festival in the UK and is internationally recognised as one of the best venues to watch cricket. Despite this broad experience, Bill is very open about the fact that he does not have a farming background. He explained, “I am on a steep learning curve with regard to dairy. But I do understand the unique relationship between the business and the members. I can pick out two occasions that brought it home to me. “Firstly, I was speaking to a lady over lunch at our AGM Conference and she began crying
"Driving change is an attitude of mind that we all need to embrace.”
"Like every other business I have worked for, the challenge is how to make things better, develop people, and deliver better money for the owners of the business. ” when she was telling me about the direct impact the November price cut would have on her business and her family. Secondly, speaking with a father and son after one of our member meetings. The father was considering investing in a new dairy unit and wanted my assurance that it was the right move for his son’s future. “Like every other business I have worked for, the challenge is how to make things better, develop people, and deliver better money for the owners of the business. However, there is an added dimension at First Milk. There is the personal relationship between the producer and First Milk, and that adds urgency. The decisions we make in the Boardroom have a clear knock-on effect on peoples lives.” After being approached about the chairman role, Bill did some research and was surprised about the size of the business, and also concerned about some of the issues facing First Milk. Bill expanded, “It is clear that there has been some politics in the business over the last few months. I have given a blunt message to the Board and Executive team that this has to stop. The only way we will succeed is by all pulling together and working as one team. “The main thing we must focus on is the lack of profitability within our cheese business. The price decrease from 1 November has put us further off the pace. This needs to be addressed quickly and we are attacking this in a focussed way. “The Executive team is undertaking a large number of projects to reduce our costs. So far they have identified a £6.5 million benefit. This covers a wide range of areas including haulage savings, headcount reduction, improved purchasing deals, and outsourcing parts of our operation that others can do more efficiently. “£6.5 million is a significant number, but I expect it to rise. We need everyone in the organisation to think about managing costs in their area better. Some people can only influence small cost savings, but add up all the small cost savings and it delivers a decent benefit. Driving change is an attitude of mind that we all need to embrace. “While progress is being made, we need to recognise that some of the activities we are undertaking will not have a benefit until the new financial year. For example, if we reduce headcount in an area, there is an immediate
"The first step with our cheese business is simple. I want to get to a situation where we are not losing money when the market goes down, and making good returns when the market goes up.” cost for redundancies in this financial year; but an ongoing savings benefit. “The first step with our cheese business is simple. I want to get to a situation where we are not losing money when the market goes down, and making good returns when the market goes up. “Members can also play their part in helping us to save costs. I am aware that members receive a large volume of mail from First Milk. We have looked at the costs of sending printed materials to members and by communicating electronically instead of by post we can save up to £90,000 per annum, and also speed up communications to members. “There are signs that markets at the margins
are rising and I am confident that the situation will improve. However, rather than waiting for the market to help us, we are attacking our cost base which makes us more competitive. We will move the milk price just as quickly as we can.” Despite only starting as chairman on 30 October, Bill has a couple of things he wants to change on the Board. He explained, “Like any large business, we must continually evaluate each member of the Board and Operations Board on their contribution to the business. One area that is not working currently is farmer director engagement with the Executive team. “In order to correct this, I have aligned the farmer directors to key parts of the business, in addition to their overall responsibilities. I have put Tom Campbell and Richard Twose on cheese; Hugh Parker and Richard Davis on liquid; and I have aligned Mike Gorton and Roger Evans to membership, First Milk Direct and First Milk Academy. Richard Davis will also be aligned to ingredients. “In addition, I think it is critically important that we have people with the best business acumen representing members on the Board. I therefore would like to move from six elected farmer directors down to four. In addition, I would like to co-opt two farmer members who have proven commercial acumen onto the Board. We need the best minds on the Board to drive the business forward and we will discuss this proposal at the next Board meeting on 24 November. “For me, First Milk is about marrying a passion and ability for dairy farming with a passion and ability for running the business. If we do this and have a clear direction, there is no doubt that we will improve our relative position and gain in strength.”
We Are Going Online As part of our drive to reduce costs, we are proposing to discontinue sending you a paper copy of StraightTalk and instead produce an electronic newsletter which is downloadable from the members website. As of next month (December), StraightTalk will be available to view online and members will receive an email directing you to the relevant page on the members website. The newsletter will also be downloadable via the First Milk website for our external contacts. We are aware that there are still members that do not have an email address. However, it is important that we are able to communicate with our members electronically as it is both quicker and cheaper. Therefore, we would like to encourage members to set up an email address and provide us with updated contact details. Please can you complete the contact details form which is enclosed with this newsletter and either return it to the membership department, call 0141 847 6800 or email the details to email@example.com. The form is also available to download on the members website.
AGM Conference & Dinner We hosted our successful AGM Conference & Dinner on Thursday 29 October at the Albrighton Hall Hotel near Shrewsbury. The event was well attended by members in the locality as well as members from West Wales, Cumbria and Scotland. During the AGM, members had the opportunity to question our Board and they were introduced to our new chairman, Bill Mustoe. This year, we added another dimension to the event by having a number of external speakers presenting during the Conference. Our chief executive, Peter Humphreys opened the conference by delivering a business update where he talked about our rigorous cost cutting regime, the ongoing development of our cheese brands and our new market related pricing structure.
Robert Wiseman captivated the audience with his account of how the Wiseman business has evolved over the years and talked about the importance of Wiseman’s strategic partnership with First Milk.
"The AGM provides a platform for members to speak up and make their voices heard...” Kevin Bellamy of Global Dairy Platform discussed a range of global dairy issues surrounding the industry including the recent dairy/health debate and the global dairy agenda which has been formulated to tackle climate change. Chris Longbottom of TNS market data service provided
members with an insight into the retail landscape with particular reference to the dairy sector. At the AGM Dinner in the evening, our guest speaker Jim Paice MP, Shadow Minister for Farming and Rural Affairs, outlined a number of agricultural priorities for a future Conservative Government including TB, food security and sustainability. First Milk chairman, Bill Mustoe, said: “The AGM provides a platform for members to speak up and make their voices heard. The event was well supported by members and contracted producers and I look forward to meeting more of our farmer members over the coming months.”
n in action. Robert Wisema
Chief Execu delivers a butisive, Peter Humphreys ness update.
Our AGM Conference DVD is now available to view on our website, log on to www.firstmilk.co.uk
Farmer rep in discussionresentative Robert Martin with members
Kevin Bellamy provides a global industry perspective.
delivers m o t t o b ata o ng Chris Ltest market d the la 4 www.firstmilk.co.uk
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Shropshire member, Elizabeth Sherwin questions the Board.
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First Milk Academy Improving Herd Health Pilot is Launched
First Milk Direct Cluster Exchange Scheme Success
Wanted Herringbone Milk Parlour, direct line Minimum 20/10. Up to 5 years old. Contact: Mr Hollingsworth, Derbyshire, 01335 342330
For Sale 20 Davlec out of parlour feeders. Can be seen working. Contact: Mr Ehm, Carmarthenshire, 01994 448357
For Sale Well bred British Fresian bull . Contact: Mr Simpson, Warwickshire, 01530 260315 or 07976 306847
For Sale 80 IAE wall mounted European cubicles, 15 Hayleys Calf Hutches. Contact: Mr Evans, Ceredigion, 01974 272249.
First Milk Academy recently piloted the ‘Improving Herd Health’ Professional Development Workshop (PDW) at the Harper Adams College in Shropshire. This is the first of two new PDWs due to be rolled-out this autumn. Improving Herd Health aims to provide members with a better understanding of diseases and their cost implications. The workshops enable participants to identify possible financial savings, focus on how improvements can be made and how to work proactively with vets and advisors. During day one of the workshop, participants examined disease costs and the implications of this for business performance. They also took part in a disease identification exercise, which covered diseases such as Lepto, BVD, IBR, Neospora, Johne’s and Bluetongue. Day two focussed on managing mastitis, by assessing the physiology of the cow and the milking process. Members then visited the new dairy unit at Harper Adams to aid their understanding of the environmental factors that affect mastitis control, including in the parlour. Shropshire member, Jill Blyth of Drury Lane Farms attended the workshop and said: “Animal health is an issue which I am very interested in and the workshop has been extremely valuable for me. “I have always been sceptical about the Academy workshops but I really believe in them now. The workshop was professionally run by Kingshay and gave me the opportunity to take 6 www.firstmilk.co.uk
a step back and look objectively at my business,” she explained. “Aside from the learning benefits, I enjoyed having the opportunity to network with other members and I liked the friendly atmosphere created during the workshops,” she added. Later in November, sessions three and four will focus on the cow environment, calving and young stock care. Day four will also include a summary of the course and provide an opportunity for participants to complete action plans for their own business. Staffordshire farmer representative, Alan Warrington, said: “The interest in this workshop has been really high and we have had to organise additional workshops as a result. These will take place at Harper Adams College on 23 November and 3, 10 and 17 December.” Feeding the Dairy Cows Feeding the dairy cows is the second new PDW which will be rolled out this autumn. This workshop adopts a cow centred approach and aims to help bridge the gap between theoretical nutrition and the practical issues of feeding cows the right feeds at the right time. The pilot workshop dates at Gloucester Farmers Club are as follows: 24 November 1 December 8 December 15 December
Dairy Daughters Exclusive Offer NEW No.1 Red and White Type Bull First Milk Direct has secured an exclusive offer with Dairy Daughters. Dairy Daughters can supply JOTAN-RED, a Jordan Red son from an outstanding EX95 Durham daughter. He is backed by six generations of excellent dams and was co-sampled in six countries. JOTAN’s half brother, KHW Kite Advent Red EX94, was crowned premier sire at the 2009 International Red & White Show in Madison, Wisconsin. JOTAN’s daughters score 3.24 for Type, ranking him number 1, 2.72 for udders and 2.45 for feet and legs. Milk is 91kgs with +0.17% Fat and +0.11% Protein. He is also 8% calving ease and is therefore suitable for heifer inseminations. As an introductory offer, the semen is available at £18.00 per straw. First Milk member, Ross Edwards from New Dairy Farm in Newport has been trading with Dairy Daughters since 2007 and has benefited from discounted offers through First Milk Direct. “Trading through First Milk Direct offers the same, unique Dairy Daughters service, but further discounts are available,” said Ross. “I have saved a significant amount of money on my semen purchases and I am able to buy top Holstein genetics, genomic sires and sexed semen at competitive prices and I receive first Ross Edwards class products and excellent service,” he added. For further information, visit www.dairydaughters.co.uk or telephone 0800 614904.
Fuel Desk Reminder
Workshops Coming Up Area Manager & Workshop Simon Pitt Good Environmental & Agricultural Practice Morag Holdsworth Improving Fertility Roger Poynton Improving Herd Health Richard Panes Feeding the Dairy Cow
As winter is fast approaching, the First Milk Direct fuel desk has received an increase in orders for heating oil. Due to high demand, First Milk Direct would like to encourage members to consider their winter requirements now and place orders no later than 11 December, for any deliveries required before Christmas. In addition to heating oil, members can purchase gas oil, derv and a range of Shell lubricants. First Milk Direct works with a number of suppliers across the UK and is able to deliver to members nationwide. To get a competitive, up to date price for your area, please contact the fuel desk on 0141 847 6816.
First Milk member, James Tudor of Hallon Farm in Shropshire joined First Milk Direct’s Cluster Exchange Scheme (CEXS) in April 2007 and it has delivered significant benefits for him. James milks 220 cows through an 11 x 22 parlour and his replacement liner change interval is approx 75 days, James Tudor based on 2500 individual milkings. “I save time and money by knowing that my clusters will arrive on time, completely sterilised and ready to fit,” said James. “The clusters can be changed in just 14 minutes and at £27 per milk cluster at each liner change (which includes breakages or replacement parts), the CEXS provides excellent value for members,” explained James. “Since using the triangular liners, I have experienced less liner slippage and my heifers adjust easier when introduced to the milking parlour for the first time. I like the liner surface scoring as it provides a health check on the cleanliness of the liner surfaces and indicates if there are any instances of mastitis. “I am reassured by the CEXS as everything is checked and certified at the CEXS factory and a Farm Assurance validation is provided for the replacement liners,” he said. James has recently installed a Cluster Flush System (CFS) which sanitises the clusters after milking each cow which allows all residues of milk to be removed from the liners before being attached to the next cow. “The CFS definitely reduces the risk of cross contamination and it is already proving to be a success,” added James. If you are interested in the CEXS, please call 0141 847 6817.
Deosan Chemicals Offer First Milk Direct’s special offer on Deosan chemical products is still available. Deosan is the market-leading supplier of dairy hygiene solutions. As part of the offer, members who buy three months of teat care products will receive the fourth month free. Products available include Super Iodip, Uddersalve, Uddercream, Teatfoam, Teatcare Plus, Super Excel, Summer Teatcare Plus, Thixodip B A, Countdown, Iodel Gel, Mastocide, Harmony Pre and Harmony Post. This offer is available to First Milk members until 30 November. First Milk Direct will continue to provide special offers on Deosan products on a quarterly basis. Details of the next offer will be announced in the December edition of StraightTalk. For further information on Deosan products, please call 0800 013 3044.
Latest updates from our cheese business
Arran Creamery Creates Unpasteurised Cheese For Marks & Spencer
Scottish Brand Showcase at BBC Good Food Show
Our Torrylinn creamery on the Isle of Arran has created a premium, unpasteurised cheese for retailer Marks & Spencer, which sees the cheese produced, matured, packed and distributed from the Scottish island. The product has won a listing in all of Marks & Spencer’s Scottish stores. The Kilmory cheddar is hand made to an exclusive recipe in a partnership between the retailer and First Milk. Richard Hollingdale, sales and markeing director of our cheese business, said: “This is our first venture with Marks & Spencer and we have both taken time and great care to ensure we are delivering a first class product for the discerning Marks & Spencer customer.” Just three farmers produce milk on the island, the vast majority of which is supplied to the Isle of Arran creamery on the southern tip of the island to create award-winning cheese.
We recently exhibited our Scottish Highlands & Islands cheese brands at the BBC Good Food Show in Glasgow. The event attracted in excess of 22,000 people over three days and was a great opportunity to promote our cheese brands alongside some of the best Scottish produce. Our Isle of Bute, Isle of Arran and Mull of Kintyre cheeses were available to sample and purchase and our products were showcased as the perfect accompaniment to a range of well-known Scottish whiskies. To expand our customer data and promote The Little Cheese Shop, we ran a competition for the chance to win a luxury hamper.
Order Your Christmas Gift Boxes Now
The festive season is fast approaching and we are pleased to be offering our members the opportunity to purchase a selection of Christmas gift boxes packed with our delicious regional cheeses. This year, our gift boxes are available to purchase via our new online shop, The Little Cheese Shop www.thelittlecheeseshop.co.uk We have specially selected a range of our cheeses to create a Christmas Family Selection 8 www.firstmilk.co.uk
Box, which is full of all of our brands including Scottish Pride, Mull of Kintyre, Isle of Bute, Pembrokeshire and Lake District for just £24 (including delivery). Gift Vouchers, branded merchandise and a few other gift box selections are also available to buy from The Little Cheese Shop. All First Milk members receive 20% discount on all purchases by entering their membership number in the special/promotional coupon code box. The Little Cheese Shop delivers every Tuesday and Thursday, with the last delivery date before Christmas being Tuesday 22 December. Delivery slots will be limited and subject to availability. Credit card payment is required via the website. Log on to www.thelittlecheeseshop.co.uk to see what is available.
Please click on the link, to view the November edition of the member newsletter.