Market pressure sees Milk Link cut its milk price

Milk Link has joined the band of milk companies announcing cuts to their farmgate prices. From 1 February, it said it would cut its member milk price by 1.75p/litre, taking a standard litre to 24.95p.

The cut was broadly similar to those announced by most of the major milk companies over recent weeks and reflected the continued decline in dairy ingredient markets and the fact that consumers were trading down and seeking promotional offers, Milk Link chief executive, Neil Kennedy said.

“The considerable downward pressure and volatility in the market comes at a time when the confidence of all dairy farmers is still very fragile,” he said. “As such, as a farmer owned co-operative, we are doing everything in our control to minimise the impact on our members’ returns and will continue to strive to improve our relative milk price building on the progress made in 2008.

He said Milk Link would continue to improve processing efficiencies; drive out costs across the business and grow the customer base for value-added dairy products.

“In addition, the Milk Link Board has also confirmed that the processing interest payment to members for the current year will be at least in line with the 10.6% paid out in respect of 2007/08,” Mr Kennedy added. “This will mean that on average a Milk Link member will receive at the end of May a payment equivalent to around 0.4p/litre across the total volume of milk supplied in 2008/09.”

Milk Link said its organic milk prices were not affected by this cut, although were subject to ongoing discussions with OMSCo.

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