Higher output brings further milk price cut

17 May 2002

Higher output brings further milk price cut

MORE milk price cuts have been announced, triggered by high milk output and weak markets.

Glanbia slashed its ex-farm price by 2.8-3p/litre for May depending on area, according to MDC Datum. This takes the value of a farmers weekly standard litre (4.1% butterfat, 3.3% protein, top hygiene bands, 1101 litres/day) to just over 15.3p/litre on the Lockerbie, Scotland contract.

Producers supplying the North Tawton, Devon factory get about 0.5p/litre less, while those supplying Appleby, Cumbria receive about 0.25p/litre more than the Lockerbie price.

"Following sharp falls in the commodity cheese markets since last summer, we have reduced our prices to take account of these circumstances," said a spokesman, adding that the price would be reviewed regularly.

Nestlé confirmed a 1p/litre price cut this week for May milk, taking the price for our standard litre to 16.29p.

The cut follows a 2p/litre reduction in April, though the companys Will Mackereth says this was set a couple of months beforehand, and market conditions have worsened since then.

Whole milk powder exports have been hit by the general downturn in prices and foot-and-mouth restrictions. "Buyers found alternative supplies and are lowering the prices they are prepared to offer," says Mr Mackereth.

Domestic markets, including milk-based puddings, custards and sweetened condensed milk, have also suffered.

"Supermarkets have been putting pressure on the market, and two major retailers re-tendered for business."

Milk Link has cut a further 0.5p/litre off its milk price for May collections, bringing the farmers weekly standard litre price down to 15.34p/litre (daily collection). This follows a 1.68p/litre cut in April.

The co-op blames excessively high production early in the season. But it says production is levelling out and hopes the lower prices will be short-lived. &#42

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