27 September 1996

Higher seasonality payments send Nestlé to top of table

By Philip Clarke

SWISS-OWNED Nestlé has shot to the top of this months Milk Price Review table as higher seasonality payments kick in.

Producers supplying its Dalston factory in Cumbria received 3p/litre over the standard litre price, compared with 2.5p/litre the previous month and 2p/litre in Scotland.

Other big movers include Aber-deen Milk, which raised its base price by over 2p/litre in August, and The Cheese Company, which also increased its summer milk bonuses.

Whether Nestlé holds its top ranking into the autumn depends on how it and other dairy companies react to Milk Marques announcement of a 1p/litre cut in its standard price from Oct 1 (offset by the waiving of its 0.7p/litre winter seasonality deduction).

Nestlé has already confirmed it will be knocking 0.3p/litre off its October price, taking butterfat to 2.75p/% and protein to 4.54p/%. It will also pay a 2p/litre seasonality bonus to its suppliers that month.

Golden Vale is actually increasing its standard price by 0.1p/litre for October supplies, but then bringing them down 0.2p/litre for November and December. This is being achieved by adjustments to the protein value, and the "liquid premium" it pays regardless of constituent levels. Further cuts are likely from January, said a spokesman, and Golden Vale will continue to make a 0.7p/litre winter seasonality deduction.

But Northern Foods and Bodfari are maintaining their current rates for at least another two months, as their existing 12-month agreements with producers run to Oct 31. Thereafter, prices are "subject to review" (but expected to fall).

Similarly Waterford Foods, which owns The Cheese Company, has not yet decided on prices, but has to give three months notice if it does change them.

But Unigate and Wyke Farms, which pay on a "Milk Marque plus" basis, will be cutting constituent values in line with Milk Marque, but maintaining their premiums at 0.8p and 1p/litre, respectively. Wyke Farms is also paying a 0.2p/litre loyalty bonus to producers who have supplied it for 12 months in October.

Woodgate Farms has said it intends to hold current prices for the rest of the calendar year, then plans a 0.1p/litre reduction in January for both its flat rate and constituent value contracts. Its seasonality schedule will also change next year, with more paid in June/July and less in December.

Wiseman Dairies is also maintaining the status quo, honouring its existing price until next April both in Scotland and to its Manchester plant.

Meanwhile, Scottish Milk has slipped down the table, having cut its August price by 0.9p/litre since July. It is also set to introduce more penal quality terms from Jan 1 in readiness for tough new EU standards which outlaw milk of over 400,000 cell count from July 1997. &#42