1 November 1996

UMP on target to double its milk field

UNITED Milk Producers has grown by about 30% in both milk volume and producer numbers since it began business two years ago. And its aim for the coming years is to almost double its current 470m litre milk field.

The groups general manager and secretary, Chris Austen, says UMP currently supplies about 17% of the liquid milk consumed in its central and southern England trading area. "Our aim is to increase that to 30% which will require 850m litres of supply," he adds.

UMP began life on vesting day, Nov 1, 1994, with 338 members and 380m litres of milk to sell. From the start its only objective was to maximise milk production profits. And, according to Mr Austen, members have consistently received about 1.5p/litre more than Milk Marques producers.

Growth in milk volume and members has been steady, with latest figures showing membership at 423 and production at 471m litres of milk. Initially the group dealt only with Unigate and Avonmore, but added MD Foods to its customer list in August this year. Unigate takes 350m litres a year from UMP members, about 40% of its direct supplies, while Avonmore makes 55% of its direct purchases from the group, or 110m litres. MD Foods takes the remaining 11m litres.

But Mr Austen says that the three firms are all keen to increase their direct sourcing, offering UMP the chance to expand at the same time. That could also mean an eventual move away from its current non-quota holding status. "We think you need to be handling about 1bn litres to make it economically sensible to hold your own quotas, because of the cost of all the administrative systems that go along with it."

Mr Austen says that UMPs members vary, from those with annual production of 300,000 litres up to those supplying 3m litres or more. The average, however, is 1.1m litres from 170 cows. And he insists that besides the advantage of the milk field being based around the major roadways and urban centres, UMP also supplies the best quality milk on offer. All producers are in band A for milk hygiene, and 95% have somatic cell counts below 250,000 cells/ml. None of the remaining 5% has SCCs exceeding 400,000, he says.

Membership costs of UMP are split between a one-off joining fee, currently £400, and an additional annual subscription of £200. But producers also have to pay another £25 a year for every 500,000 litres they produce, entitling them to one vote for every half million litres.n