Co-ops struggle to lift milk price

By Robert Harris

APRIL milk price rises are dipping below expectations, with many producers now having to accept increases well below 2ppl.

Co-ops are struggling to squeeze extra money from processors hit by tough market conditions outside the liquid milk sector.

Milk Link, the southern-based dairy co-op, has announced it will pay 1.4ppl more for farm supplies, effective from 1 April.

It had stated it wanted 3ppl more for its 3000 members as soon as possible.

But operations director Neil MacFarlane remains hopeful of getting 21ppl by early summer.

He admits it has been difficult to persuade dairy companies producing cheese and butter/powder to pay more, with foot-and-mouth disease hitting export markets.

But supermarkets agreement to pay 2ppl more for liquid milk has helped.

“We think this is the best price we can get out of each of the market sectors at the moment,” he says.

Milk Links standard price is now 20ppl. According to Milk Link calculations, a typical member averaging a daily 1400 litres on every other day collection will receive about 19.7ppl net over the year, compared with about 18.3ppl at present.

Farmers supplying Express Dairies direct are still holding out for a minimum of 20ppl following the companys 2.2ppl price increase on doorstep deliveries, twice that to middle ground outlets, including local shops and garages, and the extra to come from supermarkets.

Express is thought to be offering about 19.5ppl, but is unwilling to give more ground following its profits warning last month.

First Milk, the combined Axis/Scottish Milk business, has also yet to finalise an April price for its 4500 farmers.

“Its very important to get the right price as soon as possible,” says a spokesman.

“But we are still talking. These are difficult negotiations.”