IAN POTTER ASSOCIATES 27th April 2007
Specialist Agricultural Quota & Entitlement Brokers
Telephone 01335 324594 Fax 01335 324584 Ceefax BBC2 Page 249
Website www.ipaquotas.co.uk Email sales@ipaquotas.co.uk
100,000 3.85% 0.62ppk 2.4ppl 400,000 3.87% 0.06ppk 0.25ppl
521,001 3.86% 0.57ppk 2.2ppl 500,000 4.23% 0.07ppk 0.30ppl
Today Last Week Change 4 Weeks Ago Same Week 2006
Clean 2.30ppl 2.30ppl - 1.50ppl 4.00ppl
Lease 0.25ppl 0.25ppl - 0.10ppl 0.40ppl
UK milk prices set to soar but why are the co-ops so far behind? The 2 day DIN Conference sent the handful of real
farmers who attended back home smiling with heaps of positive energy. David Dobbin of United Dairy Farmers (UDF)
expects an average auction price for 07/08 to be around 22p and to hit 25p this winter. He questioned why the co-ops had
not diverted milk from cheese into Westbury throughout March and why the plant had only been ramped upto full 24/7
production (2.5million litres/day) in April. He once again made the point UDF has to export 85% of its milk predominantly as
powder and still easily matches the average DEFRA farmgate milk price regularly pay around 2ppl more to its farmers than
DFOB, First Milk and Milk Link without deducting any retention as well as pay an annual dividend. He commented “there are
issues in terms of market failure on the mainland, - the extra 2ppl we pay our farmers is not because we are brilliant.”
1 minute silence or 3 minute celebration for ex Arla boss With the news that Tim Smith would not address the DIN
Conference, the question was asked whether there should be a 1 minute silence or 3 minute celebration. Arla suppliers
chose the latter.
Notable absentees missed out on DIN Conference Whilst the Conference was a huge success, questions were asked as
to why none of the following were present: DFOB, Dairy Crest, Arla, AFMP, Dairy UK, DEFRA, RPA, RABDF. The
conference attracted more foreigners than mainland UK delegates who don‟t need to attend because they know all the
answers.
Sainsburys strike a big cheddar cheese contract with The Cheese Company/Milk Link The champagne corks were
popping at the Taw Valley Creamery with the news that Sainsburys will source all its English cheddar cheese via The Cheese
Company. Having been upstaged and extremely unhappy about the Tesco liquid milk price announcement, Justin King and
his Sainsburys team have certainly produced a PR coup with this announcement, which will in turn put pressure on Tesco to
commit itself to supporting British cheese. It is the first time a non-PLC processor has had a large slice of a major retailers
business. Milk Link celebrations, however, are at the expense of First Milk who have lost significant tonnage. Sainsburys will
also set up dairy development groups for cheese and supplying farmers will have the opportunity to earn milk price premiums.
Gwyn Jones v Derek Mead – Potentially the biggest contest ever seen in the West Country An article in the Western
Dairy Press has enraged NFU Dairy Board Chairman, Gwyn Jones, to the point he has thrown the gauntlet down to West
Country challenger, Derek Mead, to have an open debate at a venue of his choice anywhere in the West Country. The article
commented “And there will hardly be a resounding vote of thanks to NFU Dairy Board Chairman, Gwyn Jones, who reportedly
has suggested farmers could still trim 2.5%-3% off their cost base through „efficiencies‟.” It further accuses Jones of “battling
for the wrong side”. Comments which the articles author, Chris Rundle, attributes to Derek Mead. Jones claims he never
made such comments and whilst confronting Mead over the work the NFU is doing he challenged Mead to organise a panel
evening in which the 2 can battle out as to whether the NFU is doing a good job on behalf of dairy farmers. The potential line
up could be Mead v Jones for the main bout, supported by Hind and Kendall with Chris Rundle (articles author) and one other
on the Mead side. All they will then require is a good referee – looks like a job for Potter. Promoter – Frank Warren! Sky
Sports are to show live coverage? Watch this space for the date and venue.
Waitrose Milk Price up 1.7ppl with 100% going to its farmers, maintaining them at the very top of the retailer league of milk
prices paying at just over 23ppl.
Meadow Foods milk price up 1ppl from 1st May and its top brass at this weeks DIN Conference were very optimistic for
signs of further increases for its members.
Belton Cheese milk price up 0.25ppl from 1 May 2007.
Nestle warning over global mik price escalation With skimmed milk powder prices having risen from $2,000 per tonne in July to
$3,500 and rising, the world‟s largest buyer of milk has warned it will be impossible to pass all the increases onto consumers fast
enough. Torsten Hemme of IFCN echoed the comments made by traders and industry leaders “we cannot see the top of the roof”
when asked where milk commodity prices would peak.
Big Tractor Boy Classic Roadless Tractor enthusiast, David Shaw of Sorn Milk , has struck a deal with the Arla Milk Partnership
and Arla to release 31 of his Asda suppliers. In reaching his decision, Shaw commented that he has put his farmers interests first.
Clearly the farmers are strong supporters of Shaw and his constant efforts to improve their lot, but soon they will be on their own and
divorced from Shaw‟s representation. The 31 will not be required to give the proper notice required under their Sorn contract. As part
of the deal, Sorn Milk will continue to sell milk to Arla. Commenting on the move, David Shaw said, “I was presented with a difficult
situation and I have certainly negotiated the best possible deal for my 31 farmers and hope they will enjoy a long and fruitful
partnership with AFMP.” The loss of Shaw‟s representation has given cause for concern amongst a number of Sorn‟s 31 Asda
suppliers who fear they could be dropped in favour of new Scottish AFMP recruits. In an effort to reassure the ex-Sorn suppliers,
Chris Brown of ASDA has put pen to paper to confirm ASDA‟s ambition is for those same Sorn suppliers to continue to supply to
ASDA via the Partnership and has no plans or need to change this.
Dairy Farmers of Britain to close another loss making ACC plant DFOB is to close its Whitby factory during the summer.
Changing from a Partnership to a Limited Company and need to transfer the milk quota? We are looking for a third party for a
quota merry go round. If interested please contact Joanne.
Dairy farmers champion MP completes the marathon Amongst the 36,391 London Marathon runners in 21°C temperatures on
Sunday was Shrewsbury MP, Daniel Kawczynski, who completed the run in 5.75 hours, raising more than £5,500 for The Friends of
the Royal Shrewsbury Hospital. Kawczynski‟s charitable efforts did not go unrecognised by a number of dairy farmers, who
sponsored him as a thank you for all he has achieved on behalf of all UK dairy farmers.
All views expressed in this bulletin are those of Ian Potter Associates and a shed load of Arla suppliers. It is necessarily short and cannot deal with the
various issues that arise in any detail. As a result it must not be relied on as giving sufficient advice in any specific case. Every effort has been made to
ensure the accuracy of the content but neither Ian Potter Associates nor Ian Potter personally can accept liability for any errors or omissions. Professional
advice must always be taken before any decision is reached