12 March 1999

MM selling round fails again

MILK prices look set to fall again, after the failure of Milk Marques second selling round earlier this week.

It received bids for 44% of the milk on offer from Apr 1, but accepted none. It follows an unsuccessful first round in January when bids were received for 25% of milk.

"During the coming weeks, Milk Marque will again be seeking discussions with its customers to agree the sale of its milk," says a spokesperson. The farmer-owned co-op does not rule out a third round, possibly with lower prices.

That is the just about the only option open to it, says independent dairy consultant Mike Bessey. "In a sense they have been unlucky because the ground has been moving under their feet while this process has been going on. Sterling has been strengthening, with support and intervention prices falling."

Lower farm-gate prices after April are "almost unavoidable", says Mr Bessey. With dairy prices and markets depressed worldwide, the outlook is not good, he says. "Milk Marque cant wave a magic wand and make water flow uphill."

Time is getting tight, says Jim Begg, director of the Dairy Industry Federation. "Farmers are entitled to the market prices for milk at the moment. And it should not be a case where the price goes down because of the pressure and timing." &#42