3 November 1995

Milk Group:Going well & looking good

THE FIRST year of a deregulated milk market has been a great success for the Milk Group, the largest independent quota holding producer group.

Operations manager, Brian White, says annual turnover is about £74m and he hopes to double the current membership of over 300 producers in the coming year.

The first stage of the expansion will happen this month, when more than 30 new producers start supplying their milk through the group. And Mr White adds that more farmers are due to join in the coming year, based mainly around Milk Marques leaving dates.

An increased milk price has already been announced. From Nov 1, a net price of 25.6p/litre is guaranteed for milk of 4.1% fat and 3.3% protein.

The Milk Group was formed in November 1993 and is split into three regions – north-west, east midlands, and Severn Vale. It is keen to maintain its regional identity and controls all aspects of the business including haulage, testing, quota management and sales.

The Milk Groups objectives centre around producing the maximum return for members. "We do this by securing high value, quality customers. They are attracted by the quality of our milk and service. They also pay us twice monthly which means we have a very positive cash flow, so we can guarantee payment to our members," says Mr White.

Producers have additional security through the groups insurance scheme. "Every penny of sales is credit insured so if a company collapses then all the money we are owed is covered, and our producers get paid," Mr White explains.

And he does not rule out the possibility of the Milk Group eventually buying its own processing operation. "We have to be aware and prepared to consider any opportunity that arises."

, as any commercially successful business would do," he says.

Mike Bessey, independent dairy consultant, believes stormclouds may soon be gathering.

Brian White of the Milk Group is looking for increased membership in the year ahead.