Zenith raises producer milk price by 0.3p/litre

4 August 2000

Zenith raises producer milk price by 0.3p/litre

By Shelley Wright

ZENITH, the milk selling co-operative in the north of England, has upped its producer price from this month. But the move is not a bid to stop members being poached by other milk buyers, a spokeswoman insisted.

A cut in the standard adjustment fee, which covers transport, testing and administration, and higher monthly volume bonuses should add about 0.3p/litre to the average ex-farm price, taking the overall value up to about 17p/litre.

Standard adjustment fees will fall from £13.50/day to £12 and volume bonuses will range from 0.1p/litre for those producing an average of 1000-1499 litres/day over a month to 0.5p/litre for over 4000 litres/day.

Although the spokeswoman accepted that other milk buyers in the area were recruiting more producers, the price increase was not a result of that. Zenith, she said, had always promised to return as much as possible to producers, as soon as the money became available. The recent strengthening of the k against the £ and internal cost savings allowed increased prices, she added.

At its annual meeting last week, Scottish Milk revealed that it had recruited about 100 new members in the past year, most in Zeniths trading area.

That had boosted the Scottish Milk pool by some 60m litres, said chairman John Duncan. And, while about 10% of the organisations members had stopped milking cows during the year, most of their quota had transferred to the remaining 1600 members. "Average production of our members now exceeds 500,000 litres. At deregulation this was little over 400,000 litres," said Mr Duncan.

He said SM would continue to recruit new members and to increase its milk pool. With the numbers of dairy farmers in Scotland continuing to decline, and with SM now delivering milk to customers as far south as Oxford, Mr Duncans sights are clearly set on recruiting English farmers.


August 2000 (£/t delivered)

N (UK SP5) N (UK SP5) Imported urea Imported AN

(immediate delivery) new season (spring) (prills)

£112-116 £134 indicated £135 £104

PK NPK NPK(domestic) TSP

0.24.24 (complex) blended) and muriate

(autumn) 20.10.10 20.10.10 of potash

£108-113 £119 £112 £125

* Prices based on 20t loads for cash payment month following. Prices for smaller loads and those with extended credit terms will vary.


August 2000 (£/t delivered)

By Bridgewater Partnership

At the start of last month, major UK nitrogen suppliers offered volumes of ammonium nitrate to merchant customers for July, August and September with a specific monthly price ruling.

By the third week of July the books were closed for that month and the price moved to the August figure of £113/t on farm. Farmers wishing to buy at that price must hope that merchants have secured tonnage, as manufacturers are already checking bookings do not exceed capacity.

This is a marked contrast to August last year, when plenty of AN was available at £85/t. But the industry will soon be renegotiating gas contracts, and they anticipate a 200% rise in raw material costs.

Imports are also in short supply. Nothing seems available much further forward than September at a price equivalent to £112/t on farm. Today imported material is available at about £104/t. We are back to the £10/t differential between imports and domestic N.

Some importers are reluctant to commission loads for the spot market, though others are thought to be storing material, expecting higher prices next spring. They could make money, but the tactic also gives farmers some reassurance that there will be a bargaining position when the time comes.

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