NMR signals expansion
Wraps off United Milks processing plant plan
By Robert Harris
FARMER-owned supply group United Milk plans to build one of the UKs biggest liquid milk processing plants in a bid to put more money back into members pockets.
Financial plans are being drawn up to meet the likely £30m cost of the plant, which is expected to have a throughput of at least 500m litres a year, about 10% of the liquid milk market. It will be aimed specifically at the retail sector, says chairman Don Morris.
"Farmgate prices continue to be eroded and producers ability to reverse this position is currently non-existent. I dont believe processors are willing to pay farmers a share of the profits they are making.
"The only realistic way forward is for producers to take control and enter into milk processing on a significant scale themselves. I am 100% committed to the fact that this will happen."
Few farmer-controlled processing businesses are large enough to have real influence, he says. But preliminary research suggests building a liquid milk plant larger than any currently operating is "entirely feasible".
Support from the 800 members who supply UM with 810m litres of milk from the south of England is very high, says Mr Morris. The exact site has yet to be finalised, one of the tasks awaiting a dedicated management team being assembled, headed by new commercial director Robert Danks.
The liquid milk sector is one of the most competitive, and is considered one area where rationalisation is long overdue, especially following recent moves by supermarkets to cut their supplier base.
Expresss recent takeover of Glanbias UK liquid milk operation is thought to be just the start. Capacity is set to increase – Robert Wiseman Dairies has earmarked Droitwich for its new Midlands dairy, and MD Foods may soon build in Leeds.
But Mr Morris is undeterred. "This is one competitive market – others are equally so. It is the most attractive market for us today – longer-term, there will be others."
But Roger Metcalf of Agrifood Consultants is mystified by the move. "I would have thought it was the last thing United Milk would want to do."
Given the size of the project, the company will have to buy market share, he suggests, which will depress milk prices. "But how are they going to take milk away from existing dairy companies without upsetting them. It would take three years to build such a factory – might not those companies give early notice on UM supplies?"
Farmers are unlikely to benefit, especially if the company uses City money, he adds. "How long will it be before farmers lose control of the business? A small, niche cheese-maker with existing premises and a respected brand name could be a better buy."
But Philip Hudson of the NFU suggests that while major companies continue to invest, there must be money to be made in liquid milk processing.
"It is a competitive sector. But by building a state of the art, big processing plant United Milk clearly wants to be at the forefront of the market.
"It has long been our view that farmers should collaborate through investment to move down the marketing chain. We clearly support this move."
Pig numbers rise
BREEDING pig numbers were over 7% higher than expected in June, according to the latest ministry figures.
Provisional June census results put the UK breeding herd at 686,000 pigs, 12% compared with June 1998. But the Meat and Livestock Commission had forecast an 18% drop over the year to 640,000 pigs in its latest Market Outlook.
"We were certainly surprised to see these results," says economist Jane Connor. "They are a lot higher than we thought. But they wont affect slaughterings until the beginning of next year, by which time the market will, hopefully, be much improved."
Numbers of fattening pigs are, at 6.56m, 9% lower than a year ago, in line with MLC thinking, she adds. But Mrs Connor suspects the MLCs Dec price forecast of 107-113p/kg now looks optimistic, given the recent price cuts announced by the UKs largest processors.
"The whole market has been more disappointing than we thought. But we are still hopeful it will pick up in September. And we would hope to see a good £1/kg by the end of the year, which would help producers eat in to some of their losses." *
NMR signals expansion
LIVESTOCK information company NMR has bought national veterinary software supplier Visionary Technology for an undisclosed sum, signalling a move into areas related to its core livestock information business.
Trading as Super Technology, the new acquisition offers Windows-based client, stock and financial management software and support services. It will strengthen NMRs relationship with the veterinary profession, says chief executive Robin Turner, who plans to expand the business by investing in sales, development and customer support.
NMR is looking to buy more businesses in the agribuiness and food-chain information service sector.
Quick turnaround: Wheat stubble was ploughed a day after the combine finished cutting this field at JW Goddard and Sons Rhee Wall Farm, Brenzett, Romney Marsh, ready for grass seed to be planted in 10 days time. The Consort wheat yielded 10t/ha (4t/acre), average for the 60% of wheat cut so far, says Mike Goddard. The crop was snatched after several days of showers, and the weather has closed in since. But quality on the remaining 100ha (250 acres) appears to be holding up, he says.