By FWi staff
FARMER co-op Milk Link has announced a 2ppl price rise, in line with recent increases announced by major direct buyers.
The rise takes its standard litre price to 18.6ppl and is backdated to 01 October. The new value is achieved through higher butterfat and protein payments and quality bonuses.
It comes at a critical time for farmers, with many having left milk production and others seriously considering their options, says Milk Link chief executive Barry Nicholls.
“I hope this increase will go some way to restoring confidence against the background of an extremely difficult year for dairy farming.”
But several recent reports by dairy consultants and advisers suggest at least 20ppl is needed at the farm gate to cover costs.
Farmers For Action has started a new round of meetings to discuss prices.
They met Safeway on Thursday (09 November), and will meet Asda next week.
“Our committee decided we should be looking for another 3ppl.
:With the spot price where it is, and a serious shortage of milk, we believe the market is well able to pay that 3p and get us back on the road to recovery,” says FFA chairman Dave Handley.
Poor prices continue to affect output. Production slumped in October, firming belief that the UK will struggle to make quota this milk year.
Processors collected 1.042 billion butterfat-adjusted litres in October, according to provisional Intervention Board figures.
That is 62m litres, or 6.2%, below profile, and takes the cumulative deficit for this milk year to 248m litres, about 6.5 days supply.
Leasing prices have tumbled, with 4% butterfat trading at 1ppl.
“People are taking it purely as an insurance policy, so they can sleep easy in their beds,” says broker Ian Potter.