IAN POTTER ASSOCIATES 25th April 2014 Specialist Agricultural Quota & Entitlement Brokers Telephone 01335 324594 Fax 01335 324584 Website www.ipaquotas.co.uk Email [email protected] Issue No. 766 Today Last Week Change 4 Weeks Ago 1 Year ago

Clean 1.2ppl 2ppl -0.8ppl 0.35ppl 0.10ppl Producers 10,362 10,382 -20 10,382 10,681 in E & W £ : $ £1.67 £1.68 -0.01 £1.65 £1.53 £ : € £1.21 £1.21 - £1.19 £1.17 Crude Oil £109 £107 +£2 £107 £99 Wheat £171 £170 +£1 £171 £200 Soya meal £383 £378 +£5 £410 £436 (Commodity and currency prices – source BOCM Pauls)

The figures we quote are www.milkprices.com whose standard litre is: 1 million litre producer on EODC collection, 4% butterfat, 3.3% protein, 200,000/ml SCC, 30,000/ml Bactosan. It excludes any capital retentions or AHDB levy.

Milk Quota Available (Sale) Litres Available Butterfat % Price 500,000 3.91% 1.25ppl 300,000 4.19% 1.25ppl 3,500,000 (will split) 3.95% 1.20ppl 115,718 3.93% 1.5ppl

Milk Quota Available (Lease) Litres Available Butterfat % Price 600,000 3.85% 1.25ppl 1,200,000 4.07% 1.25ppl

1.27ppl milk price reduction for Arla members – from 28 th April It was always the case that all major GB milk purchasers would wait for Arla to be the Dam Busters and it’s happened with a 1.5 Euro Cents reduction, which converts to 1.27ppl taking producers standard litre to 33.74ppl.

No surprises other than perhaps it didn’t come a month earlier. Lots of similar announcements expected next week as other milk purchasers fall into line and form an orderly queue with price corrections. Despite this unwelcome news there is still a very strong case for claiming that Arla are holding milk prices up.

What about The Voluntary Code? Arla’s announcement of a producer price drop with less than 3 days notice must surely be the final nail in the coffin for some milk purchasers who have signed up to the Code and its 30 day milk price notice period. The likes of Muller Wiseman and Dairy Crest may decide to follow Arla with a price drop but under the Code they can’t implement any cut until June 1st at the earliest by which time Arla will have had the opportunity to implement a further price adjustment.

There is no chance Arla will change the way it operates its milk pricing across 5 plus countries so the only option for those signed up to it who are under the 3 month rule is to live with it or bin that rule.

0.435ppl milk price reduction for Dairy Crest formula producers – from 1 st May This takes producers standard litre prices to 32.125ppl for the DC simplified formula and 32.315ppl for the core formula. Cream value and retail milk price reductions are the reasons for the reduction.

Spot prices in free fall as distress milk is hawked Spot prices are simply crashing with one major milk processor claiming to have been offered one load of distress milk for this weekend at 12ppl. This is the lowest Ian has head of, however, others are certainly trading at under 20ppl typically between 17 to 19ppl.

It’s a disaster. We don’t have the processing capacity to handle all this milk or the European outlets for the concentrate and those with insufficient or no processing (especially, the brokers) with extra milk are bleeding.

Milk purchasers are under pressure and some farmers appear to be oblivious to what’s happening at the processors coal face. I recently heard of one farmer who was selling liquid milk on a 3 month contract who refused to accept a 1st May All views expressed in this bulletin are those of Ian Potter Associates and a shed load of dairy farmers. 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 1ppl price drop believing it should be a price increase. He decided to change milk buyer convinced his new buyer is immune from the market place. He believes this new milk buyer will hold his price at the current level until the autumn when prices will increase again. He and I guess many others who are thinking along the same lines are in for a reality check.

As intimated by Ian in December this year is heading towards a financial disaster for one or more processors and when the proverbial hits the fan its to be hoped that the supplying farmers don’t cop for around 7 weeks of unpaid milk.

Arla to sell more Westbury product on GDT auction The next GDT auction on May 6th will see Arla increase its product offering putting Westbury butter milk powder up for auction.

The lunatics have indeed taken over the asylum Please click on this incredible story from The Daily Mail. The story headline is “YEW must be joking? Staff blast BBC chiefs who changed milk supplier to Yew Tree Dairy because it sounds like Jimmy Saville police probe name.”

Yes, staff at BBC’s Manchester media centre have complained to their managers that stocking milk from Yew Tree Dairy shows “a lack of sensitivity” because Operation Yew Tree is the name used by the police for the Jimmy Saville investigation.

The online comments clearly show readers believe the BBC is “staffed by idiots”. The rumour is that anyone called Jimmy who works for the BBC has had to change their name by deed poll.

Click on http://www.dailymail.co.uk/news/article-2608782/Yew-joking-Staff-blast-BBC-chiefs-changed-milk-supplier-Yew-Tree- Dairy-sounds-like-Jimmy-Savile-police-probe-name.html?ITO=1490&ns_mchannel=rss&ns_campaign=1490

Promars comments in The Grocer have rattled some dairy farmers The weekly Grocer magazine is indeed in a league of its own and from a dairy farming point was where the first famous interview (rant) with the then new chairman of First Milk Jim Paice appeared.

It might not be as well read by dairy farmers as this bulletin but nevertheless three dairy farmers certainly received it and contacted Ian. Please click on this article: http://www.thegrocer.co.uk/fmcg/fresh/uk-to-produce-an-extra-14bn-litres-of-milk-a- year/356398.article

The headline is “UK to produce an extra 1.4billion litres of milk a year”. The farmers gripe was that Promar are effectively telling retailers via The Grocer that there will be heaps of milk around for the next 4 or 5 years and by default why should they pay more or even the same price as they do today.

MIDLANDS HERD SALE FRIDAY 9TH MAY 2014 - Norbury Farm, Norbury, Ashbourne, Derbyshire. DE6 2ED Herd Dispersal of the Entire Lambwell & Dovebridge Herd (275 Head) - On behalf of A D Robinson.

Exceptional Herd 5 EX 21VG & 50 GP with all Milkers averaging 82 points.

Herd Average 9264kg 4.10%F 3.17%P cc193. Cubicles & Herringbone, Lepto, BVD, IBR & Johnes Free.

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All views expressed in this bulletin are those of Ian Potter Associates and a shed load of dairy farmers. 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