IAN POTTER ASSOCIATES 20th May 2016
Telephone 01335 324594
Website www.ipaquotas.co.uk Email Issue No. 855
Today / Last Week / Change / 4 Weeks Ago / 1 Year agoProducers in E & W / 9,586 / 9,598 / 9,856
£ : $ / 1.46 / 1.44 / +0.02 / 1.43 / 1.552
£ : € / 1.30 / 1.26 / +0.04 / 1.26 / 1.384
Crude Oil / $48.91 / $44.88 / +$4.03 / $44.84 / $65.70
AMPE 2014 / 15.5 (April) / 15.5 (March) / 19.9 (Apr)
MCVE 2014 / 15.7 (April) / 16.2 (March) / 24.5 (Apr)
(Commodity and currency prices – source ForFarmers)
For more information about feed prices and market trends visit www.forfarmers.co.uk or contact ForFarmers DML: 0870 0500306
1ppl milk price reduction for suppliers to Dale Farm
This takes effect for March deliveries and reduces suppliers’ standard liquid litre price to 17.74ppl and for United’s Dale Farm Kendal to 22.14ppl (www.milkprices.com)
1ppl milk price reduction for Crediton Dairies suppliers – from 1st June
This takes producers liquid standard litre price down 22.36ppl (www.milkprices.com)
0.95ppl milk price reduction for Heler’s Cheese suppliers – from 1st June (PRODUCER NOTIFIED)
0.75ppl milk price reduction for Yew Tree Dairy (Woodcocks) suppliers – from 1st June
This takes producers liquid standard litre price down to 20ppl (www.milkprices.com)
0.129ppl milk price reduction for Muller/Direct Milk DPO formula contracted suppliers – from 1st June
This is the sixth consecutive price reduction and takes the core and simplified formula standard litre price to 24.47ppl – 24.661ppl.
GDT average index up 2.6%
Tuesday’s auction saw the lowest volumes of product on offer for over three years so the increase needs to be balanced against the tightening of supply with only 18,113 tonnes sold averaging US$2283.
Key movements:
Butter up 3.8% to average US$2697 tonne
WMP up 3.0% to average US$2252 tonne
SMP down 0.9% to average US$1658 tonne
Cheddar down 0.8% to average US$2693 tonne
Glanbia rescind part of a 2ppl price cut
Glanbia has written to producers to inform them that the previously notified 2ppl price cut for May 1st will be reduced to 1.5ppl.
This takes producers standard manufacturing litre price to 16.54ppl as opposed to the planned 16.04ppl (www.milkprices.com)
In addition, Glanbia has capped its seasonality deductions at 4.2ppl reduced from 6.3ppl as additional help to its hard pressed suppliers. A rebate will be paid on April deductions to those who were deducted above the new 4.2ppl cap.
The move has been interpreted as Glanbia sensing a glimmer of light that commodity prices have passed the bottom (see below).
Intervention stocks are rocketing
When the Commission doubled the SMP intervention limit from 109,000 tonnes to 218,000 tonnes most believed that would comfortably get the EU dairy industry through the flush.
Well the way it’s going the new ceiling could be hit before the end of this month and last week a staggering 22,018 tonnes was placed in to store taking the total to 182,518 tonnes, leaving only 35,482 tonnes which could be filled in less than two weeks. At this week’s DIN Conference Tom Tynan from the EU Commission confirmed that if the new ceiling is reached the Commission “will continue to support the dairy market” but he didn’t say at the same level.
Note, the intervention price for SMP is €1698/tonne or £1300.
World dairy markets have passed the bottom
Whilst few, if any, processors and traders are informing the town crier the conversations Ian had at this week’s Dairy Industry News Conference reinforced his belief that the world dairy commodity market has already passed the bottom.
All the signals are pointing north; especially the upward movement in dairy futures and the fact the Dutch Dairy Board have this week raised all of their dairy commodity prices up. New Zealand’s farm gate milk price pay out is also moving upwards. Spot price in GB is not in single figures as some suggested and is 10ppl plus and we are now just past peak daily production. Throw into the mix the increase in cull cow slaughtering and worldwide, especially EU, production cuts and it looks to be a certainty that the positive talk is fully justified.
It’s positive news but it’s certainly not recovery and any road to recovery is set to be a long one. Several are predicting average prices around 20ppl to 23ppl for the next 5 or even 10 years with most, if not all, believing 30ppl plus could be a once in a lifetime experience.
Anyone banking on recovery equating to 30ppl is likely to be very disappointed but miracles do happen like Leicester winning the Premiership.
Dairy Industry Conference (DIN)
Ian has attended most of the DIN Conference’s but never one where the room was packed to capacity with the majority of Europe’s big hitters in the dairy industry keen to listen to the speakers.
There was a positive buzz in the air at this week’s event tempered by the acknowledgement that farmers cannot continue at current farm gate milk prices and processors are also under the cosh.
More on the Conference in Ian’s next Dairy Farmer article but for the 2017 Conference it looks like either a larger room is required or the ceiling on attendees could be reached well ahead of the main event.
OMSCO’s claim to be the first into China is under attack
OMSCO issued a press release this week, which in its opening paragraph claimed:
“Following a historic international partnership between leading global organic cooperatives, Organic Valley/CROPP and the Organic Milk Suppliers Cooperative (OMSCo), the first shipment of UK produced organic UHT milk, has been delivered to China under this collaboration.”
According to Ian this is factually incorrect because Daioni from South Wales have been exporting organic UHT milk to China for at least four years.
Rather cheekily OMSCO’s PR spin doctors responded to Ian’s request for clarification by claiming that the wording “refers to the fact it’s a first for OMSCO since the collaboration with Organic Valley”
Daioni have subsequently confirmed that they have already raised a complaint with OMSCO and are seeking a correction and apology having read the press release as Ian did.
All eyes are now on other claims made by OMSCO to check for accuracy and possibly even a correction and apology from its PR spin doctors.
It’s great news that OMSCO are continuing to find new markets outside the EU but they need to check they hold sufficient evidence to back up any claims.
Arla to incentivise farmers to convert to GM Free Feed
Arla believe they have a consumer driven market opportunity for milk and dairy products produced using GM Free Feed for which consumers will pay a premium.
There will inevitably be some segregation and logistical issues to resolve but from work in Germany it is believed it’s a commercial marketing opportunity, which Arla intend to capitalise on.
The expectation is to pay invited farmers an additional 1 Euro Cent (0.8ppl) a litre for GM free milk to defray the on farm cost of conversion for those who are interested.
The money will also be paid to members who currently produce GM free milk for Arla, particularly; those in Sweden where all milk is produced with GM free feed.
Note, Arla are the biggest organic milk processor in the world and along with the other GM free milk it collects translates to 20% or Arla’s total milk intake as GM free.
POTTER’S BVD Tag Prices Slashed!!!!
BVD Tag Permutations / Ian Potter Associates PriceLarge & Large / £4.40
Large & Button / £4.40
Large & Metal / £4.40
Medium & Medium / £4.40
Medium & Button / £4.40
Medium & Metal / £4.40
Match up tag / £4.30
Large BVD tag Only / £4.30
Applicator / £15.00 (free with large orders)
Breaking News on BVD Tags
We have been fortunate to secure a fantastic bulk deal this week on BVD tags and are now offering them at incredibly competitive prices, and have brought our prices down on average by 55p a set.
Please don’t hesitate to call Lydia on 01335 320016 for more information and to order. Alternatively please see the Ian Potter Associates website for an order form that can be completed and forwarded to our office via email - http://www.ipaquotas.com
Remember this bulletin at the moment continues to be available free of charge and takes Ian and the team some considerable time to produce. The only encouragement to keep producing it is a combination of enthusiasm as well as Tag and Tracker sales and enquiries from our readers.
Please consider contacting us when you next require tags.