IAN POTTER ASSOCIATES 13th August 2013
Specialist Agricultural Quota & Entitlement Brokers
Telephone 01335 324594 Fax 01335 324584
Website www.ipaquotas.co.uk Email Issue No. 735
Today / Last Week / Change / 4 Weeks Ago / 1 Year agoClean / 0.20ppl / 0.25ppl / -0.05ppl / 0.30ppl / 0.10ppl
AMPE / 39.93ppl / 38.60ppl / 23.40ppl
MCVE / 36.65ppl / 36.13ppl / 30.81ppl
Producers in E & W / 10,518 / - / 10,581 / 10,724
£ : $ / £1.55 / £1.52 / +£0.03 / £1.51 / £1.56
£ : € / £1.16 / £1.15 / +£0.01 / £1.16 / £1.27
Crude Oil / £107 / £106 / +£1 / £108 / £112
Wheat / £159 / £165 / -£6 / £173 / £199
Soya meal / £388 / £414 / -£26 / £405 / £440
(Commodity and currency prices – source BOCM Pauls)
Milk Quota Available
Litres Available / Butterfat % / Price2,000,000 / 3.84 / 0.2ppl
317,329 / 4.11 / 0.2ppl
484,586 / 4.16 / 0.2ppl
Should you require any information or prices on available milk quota, please contact
Jim Paice is new chairman of First Milk
Co-op First Milk have certainly gone high profile with the announcement that former Minister of State for Agriculture, Sir Jim Paice, who was a surprise casualty in a government re-shuffle less than 12 months ago, will take over as chairman from Bill Mustoe from the 1st November.
There is no disputing the fact Jim comes with a wealth of knowledge and experience of the dairy industry with his final project having been to deliver the Voluntary Code of Practice to the industry only minutes before he was axed.
His appointment will result in some head scratching, by those who had hoped and in some cases assumed Jim would be the automatic choice as the man to carry out the annual review of the code.
At the same time Jim Baird, Wendy Radley & Willie Campbell have been picked to join First Milk’s board, as directors, subject to approval at the AGM. Tom Campbell, Mark James, Hugh Parker and Simon Weaver will stand down at the AGM.
“Houston we have a problem” as global dairy industry panics over Fonterra’s late disclosure
It was last Saturday when Fonterra dropped the bombshell declaring that a dirty pipe at one of its processing plants was likely to be responsible for contamination of three batches of whey protein. Curiously the announcement was made on Saturday, which was only two days after Fonterra closed its financial year end. If some PR guru thought the weekend announcement would dilute the impact they mis-judged it.
Markets panicked and the export of most, if not all, New Zealand dairy products was instantly stopped by both the Chinese and Russian governments. Comments that this will be a short term problem appear to be optimistic as trust in New Zealand product has overnight suffered a huge blow as has the reputation of Fonterra.
There are lots of unanswered questions, the main one of which will be how come it took Fonterra until August to announce the contamination when the product was made in May 2012 and sold in March 2013? The announcement comes 15 months after the powder was manufactured and 5 months after it was sold! Was there a whistle blower? Who located the contamination, who else knew about the contamination and when did they know? All questions Fonterra will eventually have to answer.
A recall of all affected product has been triggered and it is understood around 38 tonnes had been sold to Australia, China, South Arabia and Malaysia, much of it having ended up in baby powder with one promotion caption declaring: “nutritionally supporting your baby’s immune system”.
Overnight the issue shook the dairy world as China and other Far East buyers started to hunt down alternative safe sources of high grade powder. It doesn’t matter which brands are recalled or the tonnage involved, all New Zealand dairy products have caught a big cold.
The problem comes on the back of previous major dairy product safety scares, notably the New Zealand melamine one in 2008. Some claim this could be the final nail in the co-ops baby powder business. On a more positive note for UK and EU farmers is the fact that in January Arla declared it was shelving expansion plans in Europe to focus on expansion in China and Russia. Perhaps Peder Tuborgh had a new year’s crystal ball because for sure the potential for Arla to grow their business in these markets has rocketed overnight.
Domestically GB processors were run of their feet on Monday and Tuesday as global traders hunted down any available powder.
How long before organic infant formula is what consumers in China and other parts of the world demand?
Note, the bacteria can result in botulism, which can result in fatalities. To date there have been no illness cases linked to the products and none of the product was sold into Europe.
Fonterra Chairman’s Gerald Ratner gaffe backfires
It is less than 8 weeks ago that this bulletin reported the gaffe by Fonterra’s Chairman when he was forced to apologise for his comment “Don’t ever trust them (the Chinese) …… never”.
Perhaps now the tables are turned and it’s the Chinese who don’t trust some of Fonterra’s dairy products.
United Dairy Farmers (NI) Dale Farm wins £1million contract to China
It is unlikely to be coincidence that in less than a week after the Fonterra disaster comes the exciting news for members of UDF that its processing subsidiary Dale Farms has secured a new contract to export £1million of quality whey powder to China.
GDT auction prices track down
Tuesday’s Fonterra GDT auction saw prices track down the average index drop was 2.4% but the devil was in the detail for example WMP prices down 1.6% on average but for September delivery of New Zealand WMP the price dropped 6.6% and for October delivery 7.8%.
UK end of year quota position
The UK ended up over 2 billion litres (14%) under its wholesale quota in the year ended 31 March 2013.
OMSCO’s advertising campaign once again raises hackles
OMSCO’s promotion of organic milk is no stranger to controversy; in particular their appetite to knock conventionally produced milk in order to promote their milk as been superior. Remember their Anthony Worall Thompson organic milk poster, which was pulled.
The attached bill poster is currently on display in tube stations across London. At least one reader believes “this is a very mischievous advert – suggesting that by not buying organic milk you are buying milk where the cows have been fed GM feed. It is very negative publicity and targets fellow dairy farmers in some sort of smear campaign.”
Dairy farmers will have little chance of working together when the likes of OMSCO feel the need to publically rubbish milk produced by other systems.
Capital Dairy Company Limited accused of misleading milk pricing communication
In a letter dated 17th July to its liquid customers, Capital Dairy increased milk prices to customers by 4ppl for 1 litre cartons. In justifying the increase they cited farmer protests and that “our main suppliers have made an early move and have agreed to increase the price they are paying the farmers.”
That reference is to Dairy Crest who supply Capital with liquid milk. However, DC increased its liquid farmer price by 1.5ppl from 1st June but this was followed by a host of others including MW and Arla with similar increases for 1st June.
Capital have apologised in an email to Ian if the interpretation of their letter was to infer that DC had paid an extra 4ppl to its farmers (if only). Capital certainly need to do more research in future before they put pen to paper because the protests they refer to were post 1st June price rises and DC were by no means considered to have paid early price increases which others did not immediately follow.
Tethered Calf – Part 2
One of the directors of Kindred PR and Advertising Agency, who currently run the Make Mine Milk campaign, was quick to email Ian over their gaffe of featuring a foreign tethered calf as part of its social media advertising. The picture has been removed and the director was particularly keen to emphasise the fact that the campaign is funded by milk producers and not farmers. We could debate for hours whether farmers indirectly contribute to the campaign but we won’t go there.
One eagle eyed reader was equally quick to point out that the calf was not even a UK calf exported because it had no ear tags. Top marks and Ian wouldn’t want to play spot the difference with that reader!