The race for more milk is on with Muller Wiseman Dairies offering bonus payments to new and existing suppliers.
The company is offering a 1p/litre bonus incentive for new suppliers and is the latest processor to reveal its contract offering – it hopes to gain up to 500 more farmer suppliers.
This follows Arla Foods’ offering last week (Farmers Weekly, 22 February) with the launch of a new direct supply contract as part of its recruitment drive.
New producers who sign up to supply the non-aligned Muller Wiseman Milk Group from 1 April onwards, will be offered a 1p/litre premium above the standard litre price – currently 30.5p/litre – for all volume produced in the first year of the contract.
The premium will be paid in one lump sum at the end of the first 12 months’ supply, and after this period suppliers will revert to “existing member” status, on a standard non-aligned MWMG three months’ notice contract.
In addition, the company launched an expansion incentive of up to 1p/litre for existing non-aligned MWMG suppliers.
Producers who supply at least an additional 2% or more milk than the previous year will be entitled to claim 1p/litre on their whole year’s production. Members who produce the same amount or up to 2% more milk than in the previous year are entitled to a 0.5p/litre premium.
There are currently around 1,200 suppliers in the MWMG pool, and the company hopes to increase this by around 500 in the next few years, a spokesperson said.
The overall aim was to gain up to 400m extra litres of milk a year, and bring the company’s direct supply self-sufficiency – currently at around 70%, with the remainder of milk sourced from farmer co-ops – closer to 100%.
In January, the company’s chief operating officer Ronald Kers said the UK dairy industry needed to work to replace imports with home-produced products.
NFU Scotland said there would be more competition among processors for farmers’ milk and more opportunities in the market.
“For the first time in a long time this puts the ball at the feet of Scottish dairy farmers,” said communications manager Bob Carruth.
“Farmers now have a great opportunity to decide what will be in the interest of their businesses in the long term.”
NFU chief dairy adviser Rob Newbery said it was very positive to see a milk processor looking at how they could grow the domestic market and displace imports through incentivising producers.
He advised those looking to change contract to look at the profile of any company they are considering supplying to, and to make sure the constituents required in the contract fit with your farm and cows.
“You need to make sure you are producing to a contract that suits your business. Speak to as many buyers as you can and make sure you look at all your options,” he said.
Target areas to gain new producers include the West Country, south Wales, the Midlands, north Wales, Lancashire and western Scotland.
The new contract offering comes a week after the company confirmed its commitment to the three month’s notice period stipulated in the voluntary code of practice.
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