Co-op spell out pricing details

MILK LINK has announced its new B price for April, the first month that farmers have been paid under the new A+B system.

The scheme is designed to flatten out the co-op‘s milk delivery profile by discouraging excessive spring production and encouraging more autumn output from its 2400 members.

Every member receives an A and a B price. The A price, based on the farm‘s average daily production between Aug 1 and Dec 31 of the 2003/04 quota year, is worth 18.1p/litre for a Farmers Weekly standard litre (4.1% butterfat, 3.3% protein, top hygiene bands, daily collection of 1501 litres).

The B price, payable on litres produced above that average, has been set at 50% of the A price, or 9.05p/litre for our standard litre, which, says Milk Link, reflects market returns.

A farmer averaging 1501 litres a day would, assuming he follows the national profile, have produced just over 1565 litres a day during April.

Of that, 1423 litres would be paid at the A price (his average output last year between August and December) the rest  – 142 litres  – at the B price. That would produce an overall average price of 17.25p for our standard litre.

Milk Link expects the B price to move up, closing the gap on the A price by the summer and moving ahead in the autumn and winter.

First Milk has also announced prices of its new payment scheme, where a member‘s monthly milk production is split into core volume, based on 80% of output in the previous quota year, and marginal volume.

The co-op is paying 18.03p a standard litre for its core volume, and 12.62p for marginal milk.

This means our standard milk producer will receive the core price for 1208 litres a day and the marginal price for the rest, making an overall price of 16.93p/litre for April.