28 March 1997

Year-end bonuses keep prices near to average

WITH just one more milk cheque to go in the current season, this months Milk Price Review makes projections for average prices over the 12-month period, including any bonuses.

A year ago, these bonuses had a marked effect in determining the final running order of buyers.

But this year, with the milk market now much more depressed, there is less money available for year-end handouts.

The few that are anticipated include a 1p/litre top-up from South Caernarvon Creameries, 0.2p from the Southern Co-op, and 0.1p each from The Cheese Company and Aberdeen Milk.

With fewer bonuses, our projected prices are closer to the "average paid so far" which the Milk Price Review tracks on a monthly basis.

What has not changed, however, is the wide range of prices paid over the year which, for 1996/97, is projected at 2.19p/litre between top and bottom payers. For our standard farmer, supplying 1000 litres a day, this represents a potential loss of almost £8000.

The former Milk Marketing Boards occupy the bottom rungs of the ladder, while other groups and direct buyers have all managed to pay over 25p/litre.

Milk Marque and Scottish Milk are expected to make some further profit distribution once their accounts have been signed in June, but the payments are likely to be small. Unigate has promised to match any such 13th payment, and other buyers could follow suit.

Generally, projected prices for 1996/97 are not dissimilar to last milk years averages. But that will change rapidly now as widespread cuts start to impact on milk cheques in the new year, closing the gap between top and bottom payers.

&#8226 March milk cheques showed little change from the previous month. The only company making any significant alteration to its terms was MD Foods, which dropped butterfat to 3.05p/litre (from 3.18p) and tightened its protein cap to 3.35%.n