26 September 1997

Hefty bonuses hide weak milk prices

SEPTEMBER payments for August milk showed few changes from the previous months statements, with hefty seasonality premiums disguising generally weak average prices for the season.

The only major change was made by Waterford which cut its flat rate price by almost 2p to 21.95p/litre. After allowing for a daily transport adjustment of 0.36p, a protein supplement of 0.09p, quality bonuses of 0.35p and a level supply premium of 0.35p, this takes the Milk Price Review standard litre to 22.38p – second from bottom for the month. But for the year so far, Waterford remains one of the best payers at over 24p/litre.

This months milk statements also pointed to the cuts in milk price many will be making from Oct 1.

For example, Nestle is cutting the price to its Dalston suppliers by a little under 2p/litre, which it hopes will be the last change this year. This will be achieved by dropping butterfat to 2.146p a % and protein to 3.546p a %.

Milk Marques 2p cut has already been well publicised, with Unigate matching it for one month only, before introducing its more complex pricing regime from October. Scottish Milk has also announced a 2p cut, paying 2.03p for butterfat and 3.5p for protein.

MD Foods has stuck to its 1.5p/litre cut as indicated last August. It has, however, taken more off the butterfat and protein elements (to 2.67p a % and 2.8p a % respectively) but given a more generous group bonus – worth 0.5p/litre to Premier Milk Producers and 0.25p/litre to other groups.

MD will still be paying a volume bonus of 0.3p/litre for daily pick-ups of between 1000 and 2000 litres, with another 0.1p for each 1000 litres above that. The company has dropped its 0.15p/litre loyalty bonus.