16 June 1995

Milk Marque to pay 0.7p/litre bonus

By Shelley Wright

MILK Marque members will receive a bonus of 0.7p/litre for their milk sales between last Nov and Mar 31, 1995.

Announcing results from this five-month trading period, Andrew Dare, MM chief executive, said profit distribution was based on the standard litre composition of 4.1% butterfat and 3.35% protein.

But most producers fail to achieve the standard litre, so the actual bonus payment will average 0.68p/litre. It will be paid in the July milk cheque.

Maintained price

Mr Dare said Milk Marque had maintained a producer price of 24.75p/litre for a standard litre of top hygienic quality for the five months. With the bonus, the final figure was 25.45p/litre before transport deductions. The average selling price to customers was 26.18p/litre.

"This clearly shows that Milk Marque has delivered its promises. For the first time in 60 years farmers have been able to work together in their own organisation to establish a fair market price for milk," he said. Since vesting day, producers had seen a rise of about 8% in their payments and were now on a par with the average producer price in Europe, he added. In the first five-month trading period, Milk Marque sold almost 3bn litres of milk, generating a turnover of £780m – equivalent to £1.8bn over a full year. Finance director, Chris Melchers said the turnover was about £15m ahead of expectations mainly because farmers had produced more milk than anticipated.

Ongoing operating costs for the five months were £8.543m. Mr Melchers said this, equivalent to 0.285p/litre, covered all milk marketing activities, administration costs and general management.

Moving to the prices that producers might expect in the future, Mr Dare was non-commital. He said there were no market reasons why the price should fall. "But equally I would be surprised if there was a large uplift this year."

The price will be determined when the selling process begins in July. Milk Marque will set prices for each of its contracts and customers will be invited to bid. If, as last year, demand exceeds supply then MM will increase the price. If supply exceeds demand then the price will drop until a balance is struck.

&#8226 Six black market milk prosecutions will be made this month and there is a possibility of as many again to follow, Hugh MacKinnon of the Intervention Board told a Commons Agricultural Select Committee on Wednesday. &#42