22 March 2000
Milklink sets milk price at 16.6ppl
By Vicky Houchin
MILKLINK, the newly formed farmers co-operative, has surprised the industry by announcing a milk price of 16.6p for a standard litre from 1 April.
This marks a small rise from the recent lows, although it is 0.4ppl below the price achieved by Milk Marque during the last selling round.
However, in that time, the Intervention Milk Price Equivalent, used by many dairy companies as a base price for milk, has fallen by 1.5ppl.
The increase has been achieved by establishing a new selling process and by reducing administration and transport costs, said Milklink.
The group will also undertake collections on behalf of three of its customers from April, said Neil MacFarlane, Milklink operations director.
The price increase was welcomed by Philip Hudson of the National Farmers Union, who said he was pleased the price had not fallen further.
“Its a welcome surprise but lets not get ecstatic yet. A lot more is needed.”
Independent consultant Mike Bessey believes the announcement will be a surprise to many farmers who had expected another fall of 1ppl.
“Its not a lot of money in their pocket, but its much more than farmers were expecting.
“With the Pound up further and intervention values falling, prices should be declining.”
Dairy processors will probably be shocked that one of the former Milk Marque companies is at least maintaining its price, said Mr Bessey.
A number of companies are expecting substantial price cuts in April, he added.
“Dairy Crest has told its farmers it will be paying between 1.5-2ppl less in April.”
Mr Bessey said this announcement could be very significant.
He said: “If Milk Marque is no longer at the bottom of the league table, this could be revolutionary.
“It puts pressure on the other two co-ops to see what they come up with. People will start comparing prices.”
Both Zenith and Axis refused to say what they expect their standard price to be in April. But they will be informing farmers by the end of the month.