29 November 1996

Sqeeze continues and Marque goes bottom

By Philip Clarke

MILK Marque has slipped to the bottom of this months milk price table, following the cut in its constituent values from Oct 1.

But it has not been alone in cutting producer payments as milk cheques start to reflect the lower returns from dairy commodities and the continuing price squeeze by supermarkets.

Milk Marque has dropped its butterfat value from 2.59p a % to 2.49p a %, and protein from 4.36p a % to 4.18p a %. Similar reductions have been made by Avonmore, Nestle and Wyke Farms.

Golden Vale has only reduced the protein part of its payment, from 4.0p a % to 3.85p a %, and has increased its liquid premium bonus from 1.8p/litre to 2.4p/litre.

South Caernarvon and Southern Co-op have both reduced butter payments, but have actually increased the rewards for protein slightly, to 4.37p a % and 4.46p a % respectively.

Generally, November prices for October deliveries have been down across the board as seasonality premiums have been reduced, in most cases by 1p/litre.

The lower returns now starting to show through are reflected in latest Milkminder results from Genus, which show the first recorded drop in margin over concentrates since market deregulation in October 1994.

Despite further gains in efficiency, with yield from forage up on last year to 7.64 litres/cow a day, this has not been enough to offset the rise in concentrate costs from £138/t to £151/t and the lower milk price. As such, monthly margin per cow has dropped 7.7% to £108, with the rolling 12 month average also lower at £1337 a cow.

The October figures also show the drop in overall dairy cow yields as producers have reined in production. Average daily output was 0.61 litres down on last year at 20.36 litres.

This trend has continued nationally into November. Latest figures from the Intervention Board show yet another fall in weekly output for the country as a whole in the second week of November to 226.6m litres.n