IAN POTTER ASSOCIATES 12th August 2011
Specialist Agricultural Quota & Entitlement Brokers
Telephone 01335 324594 Fax 01335 324584
Website www.ipaquotas.co.uk Email Issue No. 634
Today / Last Week / Change / 4 Weeks Ago / 1 Year agoClean / 0.30ppl / 0.30ppl / - / 0.30ppl / 0.25pl
AMPE / 33.70ppl / 33.70ppl / - / 35.20ppl / 30.00ppl
MCVE / 32.91ppl / 32.91ppl / - / 33.16ppl / 29.68ppl
Producers in E & W / 10,896 / 10,907 / 11,223
£ : $ / 1. / 1.63 / - / 1.61 / 1. 56
£ : € / 1. / 1.15 / - / 1.14 / 1.22
Crude Oil / $ / $85 / - / $96 / $76
Wheat / £ / £163 / - / £169 / £158
Soya meal / £ / £278 / - / £283 / £279
(Commodity and currency prices – source BOCM Pauls)
Milk Quota Available
721,868 litres 3.94% @ 0.30ppl
622,578 litres 4.03% @ 0.30ppl
853,415 litres 4.09% @ 0.30ppl
692,584 litres 4.80% @ 0.50ppl
Should you require any information about the above milk quota that we have for sale then please contact
£50 million OFT fines will not be paid to farmers
The Office of Fair Trading (OFT) has confirmed penalties to be paid by 4 milk processors and 4 retailers totalling almost £50 million.
These are the final fines in respect of the 2002/2003 dairy retail price initiative when agreed retail price increases for liquid milk and cheese were charged to consumers and paid directly to dairy farmers.
It’s taken more than 9 years to finalise and the fines paid by Dairy Crest, Wisemans, McLelland and The Cheese Company total £13.26m whilst Arla were let off scott free with no fine for whistle blowing having alerted the OFT to the potential infringements.
It has been a painful experience the result of which is everyone has changed how they communicate and are now extremely cautious and careful to ensure nothing can be laid at their door claiming they have been involved with a practice designed to increase the price paid by consumers.
In the past 10 days Ian has received two letters, in response to an article he wrote for this bulletin, from one of the companies involved in the fines who have been careful to point out that any manipulation of consumer prices will be a breach of Competition Law, which would include any refusal to supply milk to a retail outlet who are viewed as selling milk too cheap.
Following the OFT’s announcement Ian was very surprised to receive numerous emails from dairy farmers suggesting the £50m for some reason should be re-paid to dairy farmers.
Sorry, but it’s not farmers’ money, in fact it’s money which has come from the shareholders of Dairy Crest, Wiseman, Asda etc and no doubt some of those shareholders could be shouting for dairy farmers to repay the fines to them. The OFT calculate the initiative cost consumers around £270million from which farmers benefited.
The £50 million fines will be deposited in what’s called The Consolidated Food Fund, which to you and I is The Treasury.
Meanwhile the so called Evil Empire of Tesco are reported to be furious over the fines and are contemplating a legal challenge against their £10.43m fine. Tesco say they intend to defend their position if necessary through the courts.
The fines were as follows:
Arla £0
The Cheese Company £1.26m
McLelland £1.66m
Wiseman £3.20m
Dairy Crest £7.14m
Safeway £5.69m
Asda £9.39m
Tesco £10.43m
Sainsburys £11.04m.
First Milks end of year results
Once again First Milks end of year financial reporting appears to be honest, clean with no spin. For example it includes sensible/conservative values for assets such as their Wisemans shares and another big tick is for once again correctly treating member capital payments as debt.
The key numbers have been adequately reported by others so no need to repeat them.
Whilst First Milk cannot exactly claim to be growing in membership numbers and volume of milk handled it would appear that both have stabilised and that recent developments and alliances are slowly convincing members that the Mustoe plan is starting to work. The litreage handled by the Co-op is around 1.5billion litres coming from 2,000 members and is steady.
Admittedly the reason First Milk bank debt has significantly reduced from £69m to £44m is due to the fact they have significantly reduced cheese stocks.
This could be considered by some as a move which cannot continue year on year however it could easily be a shrewd move by the co-op having sold the additional stocks on a rising market.
There’s little more to find amongst the bones of the accounts and the conclusion has to be that the Mustoe and Allum partnership has started to deliver results in this their first full year in charge.
The First Milk ship has changed direction and probably just in time for a number of members who were wavering. They’re in a competitive world and one which is not easy to make your mark but slowly but surely things are starting to come together.
July milk production up
July production was up 22.4m litres (+1.9%) to 1163.3m compared to 1140.9m litres in July 2010.
Cumulatively production for the first 4 months of the new quota year is up 90.6m litres (+1.9%). July Butterfat was 3.92% 10 points up on the year before and cumulative butterfat for the first four months is 9 points ahead of last year at 3.94%.