Accept reality warns MM as second round starts

By Vicky Houchin

MILK MARQUE warned dairy farmers that they must accept the harsh reality of market forces as it opened its second and final milk-selling round today (21 August).

The announcement follows talks with representatives of the dairy processing companies who forced the cancellation of the previous bidding round, amid claims that Milk Marques asking prices were too high.

Milk Marque has reduced its asking prices by about 1ppl, representing an overall reduction in revenue of £140 million. But officials now consider they have appeased the dairy processing companies who refused to bid during the first selling round.

Milk Marque chairman Poul Christensen said he was confident the August round will be successful, but was reluctant to predict how much prices to farmers would increase as a result.

“Farmers have to accept the realities of the harsh market place, but at the same time must organise themselves to extract a fair price,” he said. “This is what Milk Marque is trying to do,” he said.

The August selling process offers a total of 13.6 million litres a day on six-month contracts starting on the 1 October, 1998. Up to two million litres a day will be offered on the daily and monthly short-term markets.

The prices of milk on offer are as follows:

Main contract types Indicative price
July 1998* August 1998
Premier service 24.0 23.3
Ex-farm profile 22.5 21.8
Fluctuating supply 22.0 21.3
Varying supply 21.5 20.5
*No bids were accepted in the July 1998 selling process
after the major dairy companies did not bid

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