24 March 2000

Price surprise from MilkLink

NEWLY formed dairy farmer co-op MilkLink has surprised the industry by announcing a milk price of 16.6p for a standard litre from Apr 1.

This marks a small rise from the recent lows, although it is 0.4p/litre below the price achieved by Milk Marque during the last selling round.

But, in that time, the £ has strengthened against the k, pushing down the intervention milk price equivalent used by many dairy companies as a price base by about 1.5p/litre.

The increase has been achieved by establishing a new selling process and by reducing administration and transport costs, says MilkLink.

"It is a welcome surprise, but lets not get ecstatic yet. A lot more is needed," says Philip Hudson of the NFU.

"It is much more than farmers were expecting," says independent consultant Mike Bessey.

"With the £ up and intervention values falling, prices should be declining."

He says news that one of the former Milk Marque companies is at least maintaining its price will probably be quite a shock for dairy processors when a number are announcing substantial price cuts for April. "Dairy Crest has told its farmers it will be paying between 1.5 and 2p/litre less." &#42