Milk values battle to improve

EX-FARM milk prices showed a much needed increase in 2003/04, but not without a struggle.

Despite the appalling returns seen in the preceding milk year – the second worst after deregulation – prices were remarkably slow to improve.

Using figures from FARMERS WEEKLY‘s latest Milk Price Review, compiled by Agra CEAS, dairy farmers supplying our standard litre (1501 litres a day, 4.1% butterfat, 3.3% protein, top hygiene bands) eventually received an extra 1.3p/litre on average in 2003/04.

That takes the overall average for the milk year to 18.74p/litre.

All companies paid more than 2000/03, although there were marked variations.

Generally speaking, the table falls into thirds, with specialist liquid processors occupying the top places, followed by cheese companies, then co-ops and commodity manufacturers.

Over the year, it was the previous milk year‘s two worst payers who made the biggest gains.

United Milk‘s (later Westbury Dairies) average milk price rose by 2.99p/litre in 2003/04, and Meadow Foods‘ by 2.59p/litre.

Both benefited from better support payments, and averaged 18.29p/litre and 18.45p/litre, respectively, moving up several places in the rankings.

Wiseman achieved the biggest overall increase of the liquid players, paying farmers an extra 1.44p/litre for milk.

It took three of the top five places in our table, averaging 19.7-19.9p/litre.

The smallest increase (0.11p/litre) came from liquid specialist Southern Co-op, which topped our milk price table in 2002/03.

Its inflexible contract meant it paid more than the market warranted in that year, though it still averaged 19.21p/litre in 2003/04.

But it was Scottish liquid specialist Graham‘s Dairies that topped the league this year, paying an average of 19.94p/litre.

Overall, the cheese companies achieved similar rises to the liquid sector, though, as we have seen, these came later in the year.

Of the co-ops, Dairy Farmers of Britain chalked up the biggest increase, gaining 1.36-1.42p/litre.

Dairy farmers supplying the co-ops were on average about 1.5p/litre worse off than those sending milk to liquid processors – slightly less than in 2002/03.

But the co-ops closed the gap on the big cheese-makers to about 0.6p/litre, from about 1p/litre in 2002/03.

As we enter the new milk year, prices have come under renewed pressure and last year‘s small recovery looks increasingly fragile.