A meeting in Ruthin market drew 150 farmers and, later, 200 milk producers crammed into a hotel in Welshpool to learn about the provisional direct supply contracts on offer.
Phil Cork, Milk Link’s membership manager, told farmers that the target was to acquire 150m litres of milk a year using simple direct supply contracts. It would be a case of first-come, first-served, he said.
Later about half of the businesses represented at the meetings signed contracts, although the actual number was not revealed.
“We are determined to develop this new milk field and, while we cannot offer long-term price guarantees, we will continue to pay competitive prices,” Mr Cork claimed.
“Eventually we hope that new suppliers will become full members with a financial stake in the business.”
Several in the audience who admitted that they had panicked and signed unsatisfactory contracts last week, some rumoured to be as low as 15p a litre, were urged to seek legal advice.
Those who decided to join Milk Link were promised that collections could start the day after Milk Link’s completed the deal to buy DFoB’s Llandyrnog creamery.
Simon Banfield, an elected Milk Link farmer-director, said contracts to build a substantial milk field to supply the creamery would be ratified once the deal was completed – possibly by late Wednesday or Thursday.
Those who signed up would be linked to a financially sound, efficient, exceptionally well managed co-operative with strong customer relationships, he said.
Anyone who doubted this should study company results due to be posted on Milk Link’s website later this week. These would show a profit of £19.8m before exceptional deductions and a 10.8% return on members’ qualifying loans.
“Negotiations to buy Llandyrnog had been underway for some considerable time,” Mr Banfield said. “We felt it was very important that its stock of high quality cheese did not fall into the hands of a speculator who could flood the market and do us harm.
“It is also an efficient and well capitalised plant with a range of excellent quality products.”
Other contract details
No capital deductions and contracts could be ended by giving 12 months’ notice on quarter days. The price would be 23.5p for a standard litre with 4.06% butterfat and 3.3% protein.
To avoid deductions milk must also have a bactoscan of under 50 and a somatic cell count of less than 250.
Manufacturing, liquid and Channel Island schedules were available. A volume bonus would be paid and, though there was no set minimum volume, there would be a £10 charge per collection.