12 January 1996

Scottish Milk- an extra £2m

DAIRY farmers selling through Scottish Milk can look forward to sharing an extra £2m in the next year.

That is the saving Scottish Milk expects to make by selling its tanker fleet and putting milk haulage out to tender.

It has a fleet of 150 tankers currently handling 45% of collections. Twelve companies have contracts to transport the rest of the milk. Chairman John Duncan expects them to bid for all or larger shares of the business, to buy the tankers, and to employ most of the staff.

Managing director Jack Pirie is coy about current transport costs. But at a round of 15 producer meetings, where haulage was one of the main issues, Scottish Milk said it was aiming for an average haulage cost of 1p/litre compared with the present figure of 1.25p.

Scottish Milk, which has signed up 1800 farmers, handles more than 800m litres a year, worth more than £200m. Mr Duncan said haulage is the biggest single cost. A 20% saving would be in line with the economies already made in other areas during last year.

Mr Duncan warned farmers that they will also have to contribute to the savings by accepting that evening or night collections will be needed to fit into a modern, efficient delivery service. All milk can no longer be collected between 8am and 4pm, he said.

According to Mr Duncan in the year to November, prices had been 1.5p/litre higher than under the Scottish Milk Marketing Board. Since November the standard price had been 24.9p for a standard litre of 3.95% fat and 3.24% protein. From April, a seasonal scale of prices would be reintroduced and would follow a similar pattern to that operated by the former SMMB.