Milk data scheme to aid farmer power

By Robert Harris

A NEW service to help milk sellers match the power of big buyers and strike a better deal for farmers will be launched in April by the Milk Development Council.

The Milk Market Information Service aims to give farmers, farmer groups and selling organisations clear information on factors affecting supply and demand of milk and milk products.

The service has been triggered by industry soundings and a recent MDC report on milk pricing in Great Britain.

The report, says technical manager Kevin Bellamy, showed that milk prices were in danger of becoming removed from real market indicators, and that price signals often failed to pass down the supply chain, creating confusion.

This has unbalanced the market, and there is a clear need for more transparency, he adds.

“Factors causing a downturn in milk prices are acknowledged quicker than those causing an upturn.

“This suggests there is an asymmetry of information, with buyers having better access to it.”

The new service, backed by the Federation of Milk Groups, farmers unions and the Royal Association of British Dairy Farmers, should put sellers on an equal footing, says Mr Bellamy.

Similar price information has been provided for years in other sectors, by the Meat and Livestock Commission, the Home-Grown Cereals Authority and the British Potato Council.

Factual information backed up by analysis will help sellers make accurate assumptions. “I think we can then expect prices to reach the right level more quickly.”

Six tenders to supply information were received by close of play last Friday (2 February). The MDC will place the contract by the end of the month, and expects to introduce the service in April.

A basic form, available through MDC communications, the Press, and the Internet, will enable farmers to gauge their milk sellers performance.

More detailed information will be supplied via the internet to companies selling milk.

Mr Bellamy reckons the total budget will account for a tiny fraction of levy money. “It should represent a good return to dairy farmers.”

John Duncan, chairman of Scottish Milk and the Federation of Milk Groups, agrees.

“There is certainly a very fragmented selling structure; one where knowledge is hard to come by. This has patently hampered us as sellers.”

Some neutral observers are also in favour. “Farmers and their groups do lack knowledge,” notes one dairy analyst.

“That is not a criticism there is a lot of data out there. If it can be put to good use, it can only help farmers.”