Future of first milk

Chips · May 19, 2017

supercow said:
does that coincide with the arla mentality of if your not with them your against them?arla farmers are generally the more single minded than most..

I don't think I would subscribe to that thought, I would love to see FM flourish , Arla cannot grow to be the only uk processor and so if we are going to have competition I would far rather it be farmer owned and have the farm gate milk price as it's goal with all profits returned to the farmer , than have to compete with companies whose only goal is margin on the milk they process with no real stake in the actual value of that milk , thus making it far too easy to buy market share with farmers money .
The nice thing about organic milk is that by far the vast majority is controlled by farmer owned co-ops , it would be great to see conventional move more that way , we are all on the same side after all

supercow · May 19, 2017

I have to disagree with you @Chips a lot of dairy farmers are loan wolves and love making an extra 50 pence a year more than thier next door neighbour. In all honesty fm aren't really competing against Arla as Arla are on a European contract, whereas fm wiseman yew tree is inclusive to the uk, don't you think? I would like to think it's Arla and fm, the farmer owned coops against the rest which it effectively is. My honest opinion for first milk to still be afloat albeit at the members expense is nothing short of a miracle, we are competing against 2 of the biggest business' in the world, not just dairy businesses, and you have got those farmers that,yes they were looking after their own business, have left fm and made them technically less efficient, and not only have they survived but they paying a competitive milk price. I know some of the smaller producers who live further away from factories might still not be getting as much but if that's the way fm are going to be efficient then so be it. Does anyone think if Arla never entered the uk and fm and milk link merged the uk dairy industry would be stronger? I think that,

Chips · May 19, 2017

Not I don't think they would have been stronger, the UK is now kept honest by the fact Arla has one price across more Countries than our powerful retailers work and thus no longer can they dictate price to the processor as the other processors have to compete with arla , while at the same time the likes of Yew tree keep the market Honest by allowing UK farmers another outlet to markets beyond our borders .
In 2012 the Uk was told our prices were going to be slashed by 3ppl due to supermarkets having a milk war , despite the fact Eu and world prices were rising , this is no longer possible and we always follow the markets now directly via Yew tree or with less volatility via Arla and those whose bench mark against them .
Had you just had a Milk Link / FM merger I don't think you would have suddenly had access to these markets or the spread of brands to do this , maybe it time but not by 2017

Sid · May 19, 2017

Chips said:
Not I don't think they would have been stronger, the UK is now kept honest by the fact Arla has one price across more Countries than our powerful retailers work and thus no longer can they dictate price to the processor as the other processors have to compete with arla , while at the same time the likes of Yew tree keep the market Honest by allowing UK farmers another outlet to markets beyond our borders .
In 2012 the Uk was told our prices were going to be slashed by 3ppl due to supermarkets having a milk war , despite the fact Eu and world prices were rising , this is no longer possible and we always follow the markets now directly via Yew tree or with less volatility via Arla and those whose bench mark against them .
Had you just had a Milk Link / FM merger I don't think you would have suddenly had access to these markets or the spread of brands to do this , maybe it time but not by 2017

But it also works conversely when the European price is dropping but the UK market is strong.
As you know when the last surplus of organic milk happened, OMSCo sought out markets and opportunities when the retailers wanted to cut farm gate prices. Spread of risk is key to any selling hence why the retailers love sellers to commit to tem so they have the power.
Holding shares in the processor of your milk, whether that be Arla, FM ,DC even tesco sainsburys etc will see you benefit on both sides of the processor.

supercow · May 19, 2017

The supermarkets would not have that control because say 3/4000 fm and milk link were together we would have the power to stop any devaluing from the supermarkets. Whereas now if the European price is dropping and us in the uk suffering from the stuff happening in Germany then the whole of the U.K. Market drops. As we see with muller if Arla are dropping muller drops, muller got excited when he seen Arla dropping this spring

supercow · May 19, 2017

And let's not forget Arla undercutting fm for a cheese contract with asda a couple years ago. So at times they don't do anyone any good

farmer on a bike · May 19, 2017

supercow said:
And let's not forget Arla undercutting fm for a cheese contract with asda a couple years ago. So at times they don't do anyone any good

That contract was already being planned for by Milklink, there was investment being made at Lockerbie ready for it by Milklink. Price had next to nothing to do with it, it was about quality and service, obviously First Milk management had to say otherwise, even to their directors.

Married 2 The Mob · May 19, 2017

farmer on a bike said:
That contract was already being planned for by Milklink, there was investment being made at Lockerbie ready for it by Milklink. Price had next to nothing to do with it, it was about quality and service, obviously First Milk management had to say otherwise, even to their directors.

Sounds about right

supercow · May 19, 2017

jesus I got a bite from the famous foab,pat on the back from me. back to topic, arla categorically devalued the cheese market by undercutting first milk offloading it for below cost of production

supercow · May 19, 2017

should a man In your position not be supporting coops of all kinds even first milk? we are all in it together after all

farmer on a bike · May 19, 2017

supercow said:
should a man In your position not be supporting coops of all kinds even first milk? we are all in it together after all

I do, and I think you will find this is the first time I have commented on the FM thread for exactly that reason, but I will correct inaccurate attacks on Arla, such as the 2 you have just made.

When one company in the dairy industry loses a contract so often they claim they were undercut, the market has been devalued etc etc. But Arla consistently wins industry awards for its service to customers and the quality of it's products, it is not an accident, Arla works very hard to achieve this because at the end of the day it gets more business.

Empty shelves, product recalls etc etc loose business and can be a disaster for any company when they happen and no one is immune to them, but minimising them is key. I can think of another occasion where a company lost a contract to Arla and cried foul but the reality was their product was inferior in taste tests and for that particular deal it was crucial. Sending cheese out early when it has not matured sufficiently is a common failure amonst all cheese makers and trying to avoid this can be very difficult if demand increases and you don't have enough product.

Surface Tension · May 19, 2017

supercow said:
And let's not forget Arla undercutting fm for a cheese contract with asda a couple years ago. So at times they don't do anyone any good

It should be pointed out here that Arla shouldn't be competing against FM to win supermarket contracts in the first place. For all that Arla members rattle on about the importance of their principles, that all gets chucked out of the window when there is a big contract to be won.

coomoo · May 19, 2017

supercow · May 19, 2017

What website is that on @coomoo ? Because I'm a supporter of the coop i shall say well done Arla, I support Arla before muller!

coomoo · May 19, 2017

Weekly email from a prominent industry commentator

Moors Farmer · May 19, 2017

farmer on a bike said:
I do, and I think you will find this is the first time I have commented on the FM thread for exactly that reason, but I will correct inaccurate attacks on Arla, such as the 2 you have just made.

When one company in the dairy industry loses a contract so often they claim they were undercut, the market has been devalued etc etc. But Arla consistently wins industry awards for its service to customers and the quality of it's products, it is not an accident, Arla works very hard to achieve this because at the end of the day it gets more business.

Empty shelves, product recalls etc etc loose business and can be a disaster for any company when they happen and no one is immune to them, but minimising them is key. I can think of another occasion where a company lost a contract to Arla and cried foul but the reality was their product was inferior in taste tests and for that particular deal it was crucial. Sending cheese out early when it has not matured sufficiently is a common failure amonst all cheese makers and trying to avoid this can be very difficult if demand increases and you don't have enough product.

As does the competitive tendering process........

Great value, at great prices.

westwards · May 19, 2017

farmer on a bike said:
That contract was already being planned for by Milklink, there was investment being made at Lockerbie ready for it by Milklink. Price had next to nothing to do with it, it was about quality and service, obviously First Milk management had to say otherwise, even to their directors.

FOAB You seem to have missed out the fact Arla made an upfront payment of around £10 Million to Asda for shelf space but of course that had nothing to do with winning the tender, and FM were given the chance to beat it, and walked away !! Be honest and tell all the facts not just the one's that make Arla look like saints.
Its a dirty old world in the milk business and most producers have no idea what goes on to win these contracts !!

farmer on a bike · May 19, 2017

westwards said:
FOAB You seem to have missed out the fact Arla made an upfront payment of around £10 Million to Asda for shelf space but of course that had nothing to do with winning the tender, and FM were given the chance to beat it, and walked away !! Be honest and tell all the facts not just the one's that make Arla look like saints.
Its a dirty old world in the milk business and most producers have no idea what goes on to win these contracts !!

And you know this to be true how? As I said Milklink were working on that deal long before Arla were involved.

westwards · May 19, 2017

farmer on a bike said:
And you know this to be true how? As I said Milklink were working on that deal long before Arla were involved.

I know quite a lot of the FM facts from that time.

farmer on a bike · May 19, 2017

westwards said:
I know quite a lot of the FM facts from that time.

and you saw letters/emails from ASDA?

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