MILK Marque members will receive smaller milk cheques following the farmer owned co-operatives latest selling round.
Although the company would not give any indication what prices would be a spokesman for the company acknowledged today (Tuesday) that the price paid to producers for their milk will drop from 1 October. .
The prices achieved in the selling round reflect the very difficult market, he added. .
The announcement comes following the deadline for bids from the dairy companies which ended yesterday (Monday). .
This latest milk round was the first to take place since the publication of the long-awaited Monopolies and Mergers Commission report published in July which strongly criticised the way Milk Marque sold its milk. .
The selling round reverted to the Jan 1997 system using four contract types. However, details of prices and contract volumes were not published. .
Stephen Bates of Wye College believes the drop will be about 1ppl, possibly slightly less. .
The troubled company, rumoured to be close to a voluntary break-up, now has until the end of the year to devise a new selling system. .
Todays news is no surprise. A number of dairy companies have already dropped their milk in anticipation of the outcome. .
“If some drop their price you can bet your bottom dollar that everyone else will,” said Mr Bates. .
Last week MD Foods announced a massive 11% drop in its standard milk price while Express dairies admitted that it was waiting for the outcome of Milk Marques selling round before make a decision on its prices. .
John Bavistock, of Nestlé declined to comment on rumours of a 0.75ppl drop for its producers in Scotland. .
He confirmed there would be a drop for both Scottish and English dairy farmers but said that the companys farmers had not been formally notified. “We need to confirm with them before we announce anything.” .
It is now expected that many more dairies will announce similar price cuts since the Milk Marque value is generally considered a market floor. .