Tim Gue

10 May 2002

Tim Gue

Tim Gue farms 480ha

(1200 acres) near Ashurst

in Sussex. In addition to

the arable enterprise which

includes wheat, oilseed

rape and 112ha (280 acres)

of maize, the farm is

stocked with 220 pedigree

Holstein dairy cows and

350 Mule ewes

THE best time to kick a man is when hes down and the current milk prices certainly come as a body blow.

We expected low prices. But the combination of low global prices, very high UK production and lack of processing capacity capable of producing intervention quality powders has allowed UK prices to free fall to levels that cannot happen elsewhere in the EU.

The dairy industrys claim that there is ample capacity in the UK has been shown to be self-interested cobblers.

Timing is everything. What a pity the new United Milk factory at Westbury, although on schedule, will not be processing large volumes of milk until July. The profit margins on spot milk at less than 10p/litre would be high. However, with the first tanker loads of milk due to go through the factory this month, the whole supply side should breathe a sigh of relief.

As an investor, I look forward to a respectable milk price, either as a result of profits on cheap milk or the sale of high quality milk powders into the food industry. Either way, something must be done to take us back towards the top of the EU milk price league, instead of languishing at the bottom.

While we keep hearing that co-ops are keen to own processing capacity, at present they are only tinkering. Further merging of groups will give them more strength and resources.

But the supply side must take ownership of state-of-the-art high capacity plant, if we are to catch up with the efficiencies of the best of the rest of the world. It will be interesting to see whether they take the initiative to restructure our industry or leave it to the likes of United Milk and Wisemans.

On the farm, timely rain has encouraged grass growth after a very dry April which, coupled with a long succession of frosty nights, had reduced growth to almost zero. You can almost hear it growing now, which is a relief, as silage clamps are almost empty. Thankfully, most of our maize has been sown into great seedbeds, so prospects for forage yields look good. &#42

Something must be done to take the UK back towards the top of the EU milk price league, rather than languishing at the bottom, believes Tim Gue.

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