Published 8 August 2008
League Table - Contracts May 2008
The following prices are ranked on the basis of annual average, not monthly, prices. This calculates the price that would be paid over a full 12 months if the contract was not changed. This helps to correct for seasonality payments.
| Company | Annual average price |
DFB Liquid TESCO# |
28.50 |
First Milk TESCO |
27.34 |
Belton Cheese |
26.69 |
Arla ASDA |
26.31 |
Meadow Foods Level |
25.80 |
Meadow Foods |
25.75 |
Arla |
25.31 |
South Caernarfon Creameries |
25.15 |
Saputo (Dansco) Level Supply |
25.02 |
Glanbia Llangefni (1) |
24.89 |
First Milk Liquid |
24.80 |
DFB Liquid |
24.76 |
DFB Compositional |
24.66 |
Saputo (Dansco) Seasonal Supply |
24.64 |
First Milk Compositional |
24.54 |
** Belton Cheese is a processor on the border between England and Wales.
# The milk price will vary according to the amount of milk that is required by Tesco. Additional milk will be paid for at the conventional DFB liquid milk price. The milk price above assumes that all litres produced are sold into the dedicated milk pool.
(1) Unconfirmed price
Note: Prices are inclusive of seasonality payments and the MDC Levy. They are exclusive of VAT and any capital retention payments. Extended notes for the league table can be found below.
Milk Price Changes
Although the average Defra farmgate price fell in April and May, with seasonality adjustments starting to become more favourable from June onwards, and several milk buyers announcing some price increases, farmgate price should begin to rise in the coming months.
June, July and August saw a number of milk price rises.
Starting with June, Arla agreed from 1 June to pay 0.5ppl more on their standard contract, farmers on the Arla ASDA contract will also benefit from this 0.5p increase. Arla announced that the deal agreed with Morrisons will convert into a 0.3ppl increase. Arla will pay this 0.3ppl to some of its liquid suppliers who are not already part of a dedicated supply pool. Those who ‘do not fit into that category’ will not receive this bonus.
Also from 1 June, Dairy Farmers of Britain has increased the base price on all its contracts by 0.5ppl, while Glanbia Llangefni and Saputo both increased their price by 0.6ppl from 1 June. For August, First Milk have announced a price rise, an extra 1ppl will be added to their contracts.
June
Arla: 0.8ppl increase on standard contract (incl. 0.3ppl increase from Morrisons), 0.5ppl increase on ASDA contract; Dairy Farmers of Britain: 0.5ppl increase on all contracts; Glanbia Llangefni: 0.6ppl increase from 1 June; Saputo: 0.6ppl increase from 1 June.
August
First Milk: 1ppl increase from 1 August.
New Seasonality Payments
The last couple of years as seen new seasonality systems being implemented by Arla, Dairy Crest and the 3 main Co-ops.
These payment systems all work in a slightly different way. Milk Link and First Milk have a core volume of milk paid for at an 'A' price, while any surplus milk over that core volume is paid for at a 'B' price, which will be lower than the 'A' price in the spring, but higher in the autumn.
Arla Foods Milk Partnership (AFMP) introduced a new scheme in April 2007. The price the farmer receives is based on the “Arla Foods Milk Price Equivalent” (AFMPE), which is evaluated from the company’s returns from SMP and salted butter. This differs from AMPE which uses unsalted butter prices, which tend to be more expensive than salted. AFMP members gained a minimum of 2ppl over AFMPE, although a haulage charge is deducted.
Please Note: At present, this scheme has been suspended until 1 April 2008.
Glanbia and Dairy Farmers of Britain have a system that again calculates an average or core volume but then uses percentage profile payments rather than 'A' and 'B' prices. If you produce more than the core volume in the peak months a deduction is made to the price of all litres of milk produced, and if you produce more than the average volume in the trough months an additional payment is made on all litres.
|
A and B Price |
"Core" Volume |
Percentage Profile |
Conventional Seasonality |
First Milk |
Yes |
80% of Average Daily Production |
No |
No |
Milk Link |
Yes |
Average Daily Production in August - December |
No |
No |
| Arla | Hybrid |
Average Daily Volume in Previous Milk Year |
No |
No |
Glanbia Llangefni |
No |
Average Daily Production (Apart from Sep - Dec where it is 90% of above) |
Yes |
No |
DFOB |
No |
Average Daily Production (apart from Sep - Dec where it is 90% of above) |
Yes |
No |
Standard Litre
| Butterfat | 4.00% |
| Protein | 3.30% |
| Bactoscan | 30,000 |
| SCC | 190,000 |
| Volume | 800,000 |
Note: Volume is based on 800,000 litres on EODC (unless only EDC is available) on a profile equivalent to the UK national average profile of the past three years. (Details can be accessed at the link below.)
Month |
Volume |
Apr |
70,591 |
May |
75,531 |
Jun |
70,006 |
Jul |
69,159 |
Aug |
66,616 |
Sep |
62,582 |
Oct |
62,874 |
Nov |
60,653 |
Dec |
64,686 |
Jan |
66,526 |
Feb |
61,296 |
Mar |
69,480 |
