Issue No: 924 21st December 2017
Today / Last Week / Change / 4 Weeks Ago / 1 Year agoProducers in E & W / 9,360 / 9,365 / 9,490
£ : $ / 1.33 / 1.34 / -0.01 / 1.33 / 1.23
£ : € / 1.12 / 1.13 / -0.01 / 1.12 / 1.18
Crude Oil / $64.28 / $63.23 / +$1.05 / $63.57 / $54.19
Wheat / £141 / £141 / - / - / -
Hipro Soya Meal / £291 / £299 / -£8.00 / - / -
AMPE / 29.2 (November) / 32.7 (October) / 31.5 (November)
MCVE / 34.9 (November) / 36.6 (October) / 33.7 (November)
Feed price source: ForFarmers
ForFarmers are the UK’s leading animal feed supplier, for more information about products and prices telephone: 08457 228853, email: info.uk@forfarmers, Twitter: @ForFarmersUK
Note, all standard litre prices are those quoted by www.milkprices.com and are based on the following:
The liquid standard litre 4% bf, 3.3% protein, 30,000/ml Bactoscans, 200,000/ml SCC, 1 million litres a year on EODC but before seasonality, monthly profile payments, balancing, B price additions, capital retentions or annual incentive schemes. The manufacturing standard litre is to exactly the same specification with the exception of 4.2%bf and 3.4% protein.
All Entitlements are subject to availability and vendor acceptance:
No. of Ent / Type / Price/Ent30 / ENSDA / £100 ono
20 / ENSDA / £100 ono
SINGLE FARM PAYMENT @ £90 ACRE
The 2017 SFP exchange rate was set at 1 Euro = 89.47p, an increase of 5% on the 85,228p rate in 2016. The 2015 rate was 73.129p.
This should result in a 2017 Non SDA payment of £223 ha/£90 acre
The 2016 payment was £209 or £84 per acre
Variable & complicated nett milk price reduction for Arla members from January 1st
Arla’s milk price drop is far from straight forward but when you wade through the numbers the range of nett 1st January price cuts between 2.11ppl and 0.56ppl.
All Arla farmers receive the benefit of +0.64ppl from currency smoothing plus an additional 0.21ppl cash flow balancing totally 0.85ppl.
In addition, 72% of Arla UK members benefit by 0.84ppl if they have signed up to Arlagarden plus what’s puzzling is why more haven’t signed up given the fact its worth an extra £10,400 each year to the average Arla member! Around 570 farmers have not signed up.
Then there are three components to the one collection initiative, which kick in on January 1st
Artic Tanker Collection +0.17ppl
3” Outlet +0.13ppl
Independent Collection +0.4 ppl
0.7ppl
So the 2.11ppl worse case scenario milk price drop for some will reduce to only 0.57ppl (2.11ppl – 0.84ppl – 0.7ppl)
The Arla member 1st January organic nett price ranges between a reduction of 1.72ppl to only 0.18ppl.
All of the conventional permutations apply to organic e.g. 1.72ppl less Arlagarden plus (0.84) less one milk collection incentives (0.7ppl) = a potential nett reduction of only 0.18ppl.
In terms of standard litre prices, which include the Arlagarden plus premium the 1st January position is:
Conventional Organic
Liquid 29.82ppl 40.96ppl
Manufacturing 31.00ppl 42.59ppl
1.5ppl milk price reduction for suppliers to Paynes Dairies – from January 1st
1.5ppl milk price reduction for Dairy Partners, Newcastle Emlyn producers – from 1st January
This results in a manufacturing standard litre price (4.2% & 3.4%) of 29.04ppl. Dairy Partners are the second cheese processor to reduce its farm gate milk price from January 1st, however, both are into Mozzarella production for which prices continue to alarmingly head South.
First Milk to stand on with its member farm gate milk price for January
South Caernarfon Creameries Limited to stand on with its member farm gate milk price for January
Bitter pill in final GDT auction of 2017
The news that yesterday’s final GDT dairy auction concluded with an average price of only US$2969 down 3.9% and representing a 14 month low has come as a bitter pill for dairy farmers to swallow ahead of what should be a festive period.
In addition, the concensus is prices will go lower in early 2018.
Notable movers
Cheddar down 7.9% to average US$3389/tonne
SMP down 4.8% to average US$1675/tonne
WMP down 2.5% to average US$2755/tonne
Butter down 2.3% to average US$4474/tonne
Fonterra reduces its 2017/18 forecast farm gate milk price
Fonterra has announced a reduction in its forecast milk price reducing by 5% from $6.75 to $6.40kg milk solids.
Watsons Dairies reduce volume bonuses for 5,000 litre plus suppliers – from 1st January 2018
For any farmer supplying 5,000 litres or more of milk each day to Watsons Dairies AKA Medina from January 1st their volume bonus will be cut by 0.4ppl to a maximum of 1.6ppl for anyone supplying 15,000 litres/day or more which when multiplied up is certainly an annual reduction closer to £20,000 or more.
Look forward to Christmas Hangovers – (Source DIN)
Barry Wilson’s latest DIN Market & Prices commentary pulls no punches and highlights the grim reality that we are currently experiencing a seasonal spike in demand “masking the brutal reality of what’s coming when it clears. It is not a pretty picture” commented Dairy Industry Newsletter.
“It’s going to be a brutal start. And then, come the flush, it will get worse.”
Arla Correction
In the last bulletin (8th December 2017) we foolishly got our decimal point in the wrong place and the annual gain for an Arla producer by signing up to Arlagarden plus was stated as £1040 for a 1.3 million litre producer. It should have read £10,400. That’s a big error so apologies and we hope you all signed up in time. Thank you to the numerous Arla readers who were very quick to alert us to the error.
However, of bigger concern are the reasons why 28% of Arla farmers haven’t signed up to the initiative to receive the extra money.
10,000 cow Chinese dairy farm
The numbers are staggering as are the claims on the farms animal welfare, which they claim are among the most strict in the world. Currently 2 x 80 point rotary parlours milk 3,000 cows 3 x day and the plan is increase to 10,000 cows.
Cheapest BVD tags on the market
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We don’t think this can be beat but if you can let us know!
We offer incredibly competitive prices on a full range of visual livestock tags. Our BVD tags include the test and a free applicator on your 1st order over 100. Please contact the office on 01335 320016 or email for more information, or visit our website http://www.ipaquotas.com
BVD Tags / PriceLarge/Medium & Large BVD set / £4.30
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.Remember this bulletin continues to be available free of charge and takes Ian & the team considerable time to produce. The only encouragement to keep producing it is a combination of enthusiasm, tag sales & enquiries from our readers
Here’s wishing all our readers and their families a Merry Christmas Happy and Prosperous 2018 from all at Ian Potter’s offices.
The remaining news items relate to Arla/UKAF/EDL and what has been described as a bloodless coup – The three stories are in date order, concluding with a lengthy Q&A, which will be of particular interest to Arla farmers and is headed Arla – farmergeddon..
Please click on this link for the full stories: Jonathan Ovens Farmageddon
Jonathan Ovens is No. 1 target for the Arla assassins (11th December 2017)
Over the weekend rumours of a plot to execute current UKAF Chairman Jonathan Ovens have gathered pace and it certainly appears he is the number 1 target for what looks at the moment to be a kangaroo court with fellow UKAF board member Johnny Russell as chief prosecutor, judge, executor and undertaker all in one.
Speculation is rife with what appears to resemble a bloodful coup (AKA assassination) with suggestions that six of the ten current UKAF board members have had numerous secret meetings plotting to oust Ovens both as Chairman and as a supplying member of milk to Arla with at least two others potentially on the radar for similar treatment.
It is a fact, Ake Hantoft announced his intention to retire as Chairman of Arla Foods AMBA from May 2019 only a few days ago and this looks on the surface to have accelerated moves to oust Ovens to ensure he is completely out of the picture in terms of any succession planning to follow Hantoft.
It’s certainly explosive politics for the Arla co-op to be involved with and it’s not looking like this is going to end well for anyone in the battle for the position of top dog at Arla.
For sure this story is sure to run and run and run. We will post statements in response from the individuals concerned and or Arla as soon as they are received.
Assassins creed. The deed is done. (13th December 2017)
The plot to execute Jonathan Ovens succeeded on the morning of Tuesday 12th December following a UKAF Board conference call.
With immediate effect the dairy farming business of D Mortimer & Sons, of which Jonathan Ovens is a partner, had its Arla membership terminated, which automatically triggered his ineligibility to serve as an Arla AMBA board member. That’s basically how 6 board members, and one in particular, Russell, succeeded in their quest to remove him as both a member and as a board member.
Ovens has confirmed that he is taking legal advice on a number of fronts including personally against those directors involved in his execution on a little known defamation technicality, but as of now Ovens claims the D Mortimer business has not received notification of the grounds or charges and Ovens claims neither does he have any right of appeal. He says he was given two choices to either resign from the UKAF board in return for retaining his Arla membership or, if not, the resolution would be put to the vote.
He refused the same ultimatum which was put to him at different times by both Ake Hantoft and Johnnie Russell becausehe doesn't think he has done anything wrong. So on Tuesday the resolution went to the vote and the 6 who had been working on this for some considerable time ensured the axe fell.
In the 24 hours following the shock decision, email, telephone calls and text have rained in to Ian from Arla members, some of whom love Ovens, some who clearly don’t love him but most acknowledge what he has achieved on their behalf financially. And this is from both AFMP members and some former Milk Link members. They know that their businesses and their families WILL be worse off long-term without Ovens battling their corner. Most don't give a monkeys about corporate governanceand some can't even pronounce it. But they do understand the milk cheque and they know Ovens is a battler in a big bad world where every trick in the book and more are being used to screw down their price. Corporategovernance or a higher milk price? It's a no brainer for the farmers to put those in order of priority. And at 17ppl the farmers wouldn't care if the devil or Ronnie Biggs negotiatedtheir price if they got a higher one.
It’s incredible that six farmerssitting as prosecution, judge, executor and undertaker have allowed a personal vendetta between Hantoft and Russell against Ovens to come over and above the best interests of the co-op, and toside-line Arla staff and senior management in this extraordinary chain of events. They've made it look as if the whole business is being run by a bunch of squabblingamateur farmers fighting over the top job just 11 days after it became vacant. It is scandalous and the best example in historyof why farmers should not be involved in running the business.
Whilst the gang of 6, dubbed by one farmer as the Klu Klux Klan, may have received legal advice they certainly don’t appear to have thought through the PR explosion this has triggered. The fallout from this will take some controlling now unless the evidence against Ovens is damning indeed. And if it is then why doesn't Arla publish it.It has certainly re-opened the Milk Link v AFMP battle front line and over the coming months many column inches will be devoted to this because it won’t be a storm in a tea cup. This looks like being nuclear and will be if or when Ovens sets up his Producer Group.
Good luck Arla farmers because your co-op looks as if it has been dumped in the middle of the Mother of All Shit streets.
Below is a joint statement from the Board of Directors of Arla Foods AMBA, which was allegedly prepared prior to Tuesday’s events and which we previously agreed to publicise.Before that and on a lighter note here are a couple of quips in from farmers.
1) Thank goodness the co-operative spirit is alive and well in Arla! They say that if you want to get three farmers to co-operate you have to shoot two of them. Well Hantoft is going so he doesn't count and Ovens has been shot, so that leaves Russell.Only another 11,999 Arla members to get through!
2) (One farmer to his mate) Apparently the management in Arla House in Leeds was very quiet yesterday.(Mate replies) Yes, six farmers and a bloke from Denmark dug them an effing big hole and dumped them in it without any ropes. But its OK now. The farmers have gone back home to do the milking.