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Update on milk price post MMB

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    Update on milk price post MMB

    Latest in todays farmer weekly:-
    DAIRY co-ops stand accused of weakness in talks with milk buyers and of failing to secure a 2p/litre increase in farm-gate prices.

    Processors are also coming under fire.

    Dairy Farmers of Britain announced an interim price rise of 1.1p/litre backdated to Oct 1, taking the Farmers Weekly standard price to about 17.3p/litre.

    The other big co-ops, Milk Link and First Milk, will unveil new prices within days.

    But judging by recent announcements they are unlikely to achieve much more.

    Jim Walker, president of National Farmers' union Scotland, said he was incensed by the figures.

    Farmer pressure had persuaded big retailers to raise shop milk prices by the equivalent of 2p/litre at the farm-gate and triggered a similar move on cheese, he said.

    Big processors also increased the price of doorstep milk.

    Those markets account for just 57% of the UK's raw milk.

    But Mr Walker believes co-ops and processors should have achieved better returns on the 25% of raw milk destined for the "middle ground" market - convenience stores, garages and corner shops - as milk and cheese.

    "We did not just open the door for the co-ops, we kicked it open. Now we are getting all sorts of excuses. Co-ops have demonstrated extreme weakness in their negotiations."

    But some co-ops blame farming unions and the pressure group Farmers for Action for raising hopes of a 2p/litre across-the-board rise.

    A spokeswoman for Dairy Farmers of Britain said it was very difficult to achieve price rises beyond the retailer initiatives.

    "Those price rises are not market led, and the rest of the market needs careful negotiation," she said.

    Dairy Farmers of Britain was still talking with some customers and would review the price monthly, the spokeswoman added.

    Reform of the MMB was most definatly needed but we got it wrong.

    Be sure you get it right!

    #2
    Ianben;

    In skimming through US news articles, I have seen that they are in a milk surplus problem, with very low prices.

    I understand that the British MMB was dismantled because of the EU agreement, which does not allow any monopolies, is this right?

    Why exactly don't British milk producers work together, and create a closed co-op, and regulate supply?

    Or would regulation of supply not work cause imports would just undercut your co-op anyway?

    Could it be your problem has more to do with the EU imports, and less to do with domestic price/supply control issues?

    We have this problem with the CWB.

    Imports are threatened all the time... and the CWB makes sure the price is always lower than imports...

    So Ianben... we really are back to square one again...


    ANYONE can price discount... (the CWB calls it price differentation or pricing to market), isn't it better the person responible for growing the grain is responsible to give it away, rather than someone 900 miles away?

    The CWB sales dept. was supposed to meet with us in August, the cancelled, and never re-scheduled...

    Any one wonder why after this springs "The CWB has not sold this year's entire crop at last years prices." fiasco?

    Comment


      #3
      Hi Tom
      EU was final straw in long debate over future of MMB. Mearly splitting MMB into north and south would have been acceptable and was an option available.
      I know see milk as a poor comparison but the similarities in premium markets I think is very similar.
      This is where the competition has been the greatest problem in narrowing premiums between liquid and manufacturing sales.
      I agree this has not been the only influence strong pound etc.have all been a factor.
      I agree there was need for reform also. Cost of distribution/administration was reported to be reduced by 50% when competion entered the market.
      Something I think is clearly possible in the CWB.
      However I think the Dual market we adopted did lead to too much competition in the market and I am sure this was because we saw the MMB as a buyer when in fact they were an un- priced seller.
      Which is what I feel is your main complain with your CWB today isnt it.

      Like the trade wars in the supermarkets/fastfood chains when a new entrant or market share becomes an issue and prices are driven down to silly levels with no change in supply or demand.

      Perhaps you or your wife, with her experience, could comment on this Lee ?

      Will keep trying to get off this first square!!

      Regards Ian

      Comment


        #4
        Ianben;

        You are a good sport, we need to look at these issues without emontional attachments... which is tough to do!

        A big strike against the CWB is that they are so emotional!

        WHEN the Parliamentary Committee asked the CWB to allow some marketing freedom... the CWB told Parliament to but out and mind its own business...NOT a smart move!

        Now the CWB has raised an emotional campaign against the farmers in prison... again if they had kept quiet, and allowed the Directors up for election to make the comments... they would not have been in the political arena...

        THe backlash against the CWB could bring out a big vote... many years under 50% return, so this one could really change election dynamics this year!

        Comment


          #5
          Latest develpments from farmers weekly.

          SCOTTISH farmers fed up with low milk prices are threatening direct action against dairy processors in England.

          Producers north of the border said demonstrations were likely unless processors passed back a 2ppl price rise agreed by retailers.

          Jim Walker, president of National Farmers’ Union Scotland president, said the union was consulting its members about whether action was needed.

          "Processors must uphold their end of the bargain," he said.

          "We are warning them, in no uncertain terms, of the anger they will face if evidence continues to emerge of their willingness to squeeze margins unjustifiably.”

          Scottish interest in the prices offered by England-based processors rests on the fact that many of Scotland’s producers sell their milk to First Milk.

          The farmers co-operative deals with the major UK processors, including Dairy Crest, Express Dairies and Arla Foods.

          It has agreed to increase producer prices by just 1.1p/litre.

          Dairy Crest has pledged to increase its milk price for direct suppliers in stages to 1.42p/litre by December.

          But Mr Walker said the increases were scandalous because they falls well below the 2p/litre target set by the union.

          Comment


            #6
            IanBen;

            Interesting enough our MMB's sold all their processing Capacity to EU interests... they had the complete value added chain...

            Many Canadian farmers are complaining that Marketing Boards here are paying so little the farmer is going broke.

            I guess the government just wants to control farming through subsidies... making survival economically dependant on gov. money.

            Is this not really the key to why we farmers are where we are at today?

            Comment


              #7
              Well I suppose if I am totally honest with the amount of subsidies I recieve I should call myself a government employee.
              Why then do I like you bust a gut to grow and harvest a crop?

              You have my admiration and respect for harvesting under the conditions you describe -8C and 20%ice in the tank.

              Totally beyond my perception of harvest and what a combine and dryer can do.

              However I do consider myself a farmer because I too will do my best to grow and harvest a crop.

              I am sure there would be no surpluses if government was in charge of growing and harvesting!!!

              You see all the faults with CWB

              Can you not see problems of dual market?

              Especially the blame when things go wrong.

              Would the government reform CWB if they could be sure they would not be blamed for result if not as expected?

              Would Bush have done well in electios without farm bill?

              Isnt this why goverments will always meddle in agriculture.

              When things go wrong with dual market who will Vader blame?

              CWB or Tom and Parsley.

              Get it right make CWB a real buyer of grain. Cash price always available.

              Comment


                #8
                Ianben;

                WE have problems with the CWB now... as is apparent in so many ways.

                Italgrani goes broke, and we farmers have no knowlege of how much money we even lost...

                Freedom of Choice obviously has costs and requires more attention to marketing and which products a farm produces...

                But on the other hand the innovation and productivity created from such transparent market signals are needed to keep our grain industry competitive.

                AS milk consumption and production change... so farmers must change... just as the EU has and is totally changing (expansion to the east) who will produce what AG products for EU consumers.

                The challenges created by change are gut wrenching I know... how do we survive?

                I do not believe "hiding our heads in the sand" ever solved a problem yet... and doubt that it will work now or in the future...

                How do farmers work together in the EU to return a fair price to milk producers? I hope our Canadian milk supplied at below cost... from subsidied domestic production through our Canadian MMB's and US and EU subsidies do not destroy your farms at home Ianben.

                I see our Canola Crushers surviving in spite of all our problems...

                I see innovation and creativity... from an open market place... new products and new opportunities... and prices that Ianben you can take to your bank from our WCE Canola futures back in your home town!

                THat is pretty neat, isn't it Ianben?

                Comment


                  #9
                  Hi Tom
                  Canola is the product which has the fairest pricing and most understanding between producer and processor in UK too.
                  There is even real market development, niche oils etc. Feels like a real partnership.

                  Something we dont have with millers and malt even without the CWB.

                  Dont know why?

                  Comment

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