Latest milk buyer guide reflects diverse market

DairyCo has released its latest guide to milk buyers, providing farmers with information about the strategy and performance of GB’s major milk purchasers.

Since its last report, the industry has undergone significant changes. “Three years ago, most companies were pursuing very similar business strategies, which reinforced a culture of intensely competitive price discounting,” said the guide.

Now, although milk buyers were still competing for large retail-aligned liquid contracts, they were developing more diverse portfolios. This included investment in processing capacity for cheese, butter and whey, and development of international trade.

“Milk supply contracts have been evolving to reflect this greater end market diversity, giving producers more opportunities to benefit, for example, from production systems which deliver high protein or butterfat levels.”

In 2011-12, most milk buyers’ financial performance was relatively strong, it said. “Operating profit appeared to be stagnant among most of the dairy heavyweights, while specialist cheese companies saw a much greater increase in profit.”

Market report