Barber’s introduces ‘next generation’ milk contract

The world’s oldest cheddar-maker, Barber’s, has revealed the terms of its new, transparent, milk contract which will pay producers 30.13p/litre in February.

The “Barber’s Assured” agreement is voluntary code compliant, encourages more accurate forecasting and introduces a base milk volume for 2017, with an added 8% higher threshold for producers, based on volumes set last December.

See also: Revealed: Milk contracts most exposed to market volatility

Any milk above the base volume will be bought by the processor at AHDB’s Actual Milk Price Equivalent, (AMPE) indicator minus 2p/litre.

This market indicator, which reflects current butter and skimmed milk powder values when the produce is ready to leave the processor’s site, stood at 30.5p/litre in January 2017.

The contract will also introduce elected farmer representation and doubles the notice period Barber’s must give its 130 producers to 12 months.

The contract is based on 4.1% butterfat and 3.28% protein constituents, accounting for 95% of the total price paid to Barber’s farmers, which was ideal for cheesemaking, said the firm’s milk supply manager, Michael Masters.

“The Barber’s Assured aspects are distinct to our needs for cheese, and high protein and infant formula whey production for our customer base.

Better security

“This provides more security not only to the Barber’s business, but also to our suppliers in general as any non-notified “overproduction” will now impact just on those who have exceeded their base, rather than the impact having to be borne by the whole milk pool.”

He added: “In times of high market demand, the AMPE transparency may encourage farmers to supply more, and if more than we can cope with processing capacity wise, we will still be able to market onwards.

“In a reverse situation, if markets plummet, if some farmers choose to expand moving out of a downturn, if this expansion is beyond their annual volume, then only they will be impacted by the reduced AMPE price.”

Barber’s has a customer base of 200 buyers in the UK and exports to 20 countries around the world.