17 May 2002

Higher output brings further milk price cut

MORE milk price cuts have been announced, triggered by high milk output and weak markets.

Glanbia slashed its ex-farm price by 2.8-3p/litre for May depending on area, according to MDC Datum. This takes the value of a farmers weekly standard litre (4.1% butterfat, 3.3% protein, top hygiene bands, 1101 litres/day) to just over 15.3p/litre on the Lockerbie, Scotland contract.

Producers supplying the North Tawton, Devon factory get about 0.5p/litre less, while those supplying Appleby, Cumbria receive about 0.25p/litre more than the Lockerbie price.

"Following sharp falls in the commodity cheese markets since last summer, we have reduced our prices to take account of these circumstances," said a spokesman, adding that the price would be reviewed regularly.

Nestlé confirmed a 1p/litre price cut this week for May milk, taking the price for our standard litre to 16.29p.

The cut follows a 2p/litre reduction in April, though the companys Will Mackereth says this was set a couple of months beforehand, and market conditions have worsened since then.

Whole milk powder exports have been hit by the general downturn in prices and foot-and-mouth restrictions. "Buyers found alternative supplies and are lowering the prices they are prepared to offer," says Mr Mackereth.

Domestic markets, including milk-based puddings, custards and sweetened condensed milk, have also suffered.

"Supermarkets have been putting pressure on the market, and two major retailers re-tendered for business."

Milk Link has cut a further 0.5p/litre off its milk price for May collections, bringing the farmers weekly standard litre price down to 15.34p/litre (daily collection). This follows a 1.68p/litre cut in April.

The co-op blames excessively high production early in the season. But it says production is levelling out and hopes the lower prices will be short-lived. &#42