Arla

jade35

Member
Location
S E Cornwall
Must be doing something right(y)
  1. Arla Foods UK ‏@ArlaFoodsUK 3m3 minutes ago
    WIN - The @BestFactory2016 Supply Chain Award is presented to Arla's Aylesbury site #bfa2016

    Cuu65ZnXgAA_W7Y.jpg
 

st piran

Member
Location
cornwall
There's not really any point comparing prices at the moment as prices are changing all the time, An average price say over two years is a better way to compare prices,

I dare say even with an average over the last two years then the same would still apply in Cornwall[emoji85] lets hope it's different going forward over the next two years and beyond. After going to a district meeting it would now seem more things like currency, renegotiated German contracts, falling production ect, are now going to finally start working in our favour. We'll see..............
 

dinderleat

Member
Location
Wells
Crediton dairy probably above Arla for 2-3 years but when you see the amount of milk they buy compared to Arla they can afford to pay a bit more. I think Arla members account for 23% of the total milk produced in the UK think the next biggest is tesco aligned at 5%
 

Sid

Member
Livestock Farmer
Location
South Molton
Crediton dairy probably above Arla for 2-3 years but when you see the amount of milk they buy compared to Arla they can afford to pay a bit more. I think Arla members account for 23% of the total milk produced in the UK think the next biggest is tesco aligned at 5%
So if you think that why do they bother with direct supply? They want milk from a known source not buying room who knows where from a broker.
Arla's with the economies of scale should be sending more back to their members?
 
Crediton dairy probably above Arla for 2-3 years but when you see the amount of milk they buy compared to Arla they can afford to pay a bit more. I think Arla members account for 23% of the total milk produced in the UK think the next biggest is tesco aligned at 5%

Because Crediton has such a small milk field there will be efficiency savings on haulage.

I suspect that like many smaller daries they will always pay more than Arla because they have to. There is a real risk in supplying a small dairy without an evergreen contract that at some point they will go bust or terminate your contract. Their price will track the Arla price and they will do their best to stay above it or they will lose their supply. Without the competition from ARLA they, and many other daries, would undoubtedly pay less.
 
Arla's with the economies of scale should be sending more back to their members?

Unfortunately there are also plenty of diseconomies of scale as well and because Arla have expanded so much in the past 5 years they are still very much in a development phase.

If you look to NZ then the highest payout each season is almost always from Tatua, a small co-op just out of Hamilton. They have only 112 suppliers, producing 140m litres, all within 12km of the factory so they have big savings of haulage. When i worked on a Tatua factory in '07 they only ran 3 tankers. They have a very small product mix and most of their supply goes into Japan.
 

Sid

Member
Livestock Farmer
Location
South Molton
Because Crediton has such a small milk field there will be efficiency savings on haulage.

I suspect that like many smaller daries they will always pay more than Arla because they have to. There is a real risk in supplying a small dairy without an evergreen contract that at some point they will go bust or terminate your contract. Their price will track the Arla price and they will do their best to stay above it or they will lose their supply. Without the competition from ARLA they, and many other daries, would undoubtedly pay less.

Unfortunately there are also plenty of diseconomies of scale as well and because Arla have expanded so much in the past 5 years they are still very much in a development phase.

If you look to NZ then the highest payout each season is almost always from Tatua, a small co-op just out of Hamilton. They have only 112 suppliers, producing 140m litres, all within 12km of the factory so they have big savings of haulage. When i worked on a Tatua factory in '07 they only ran 3 tankers. They have a very small product mix and most of their supply goes into Japan.
So has North Tawton.
If Arla has a high number of suppliers in Devon and Cornwall they should be efficient it would be a bad job if they aren't in a large milk field. 3 lorry and drags go past here everyday.
Why do dairies pay on volume bonus when it sounds like distance is more of a factor?
Crediton have raised their price long before any of the big boys. Also they are doing lots of clever things that give them and the suppliers a premium.

If Arla have diseconomies of scale at their level then I'd be asking questions and lots of them! Many on here spout big is beautiful...sounds like it isn't and not just at farm level!
 
What do you mean ' So had North Tawton'? Are you referring to it having a small milk field because North Tawton has a huge milk field and a terrible road network. It takes me nearly an hour and a half to get there in a car so would probably be 2 hours in a tanker. Each of those lorry and drag units cost over £200k where as an artic tractor unit is about £60k and the trailers go on forever. This is one of the reasons there has been a big move to artic collections recently.

As said before with big expansion it can take a while for the economies of scale to filter through.
 

Sid

Member
Livestock Farmer
Location
South Molton
What do you mean ' So had North Tawton'? Are you referring to it having a small milk field because North Tawton has a huge milk field and a terrible road network. It takes me nearly an hour and a half to get there in a car so would probably be 2 hours in a tanker. Each of those lorry and drag units cost over £200k where as an artic tractor unit is about £60k and the trailers go on forever. This is one of the reasons there has been a big move to artic collections recently.

As said before with big expansion it can take a while for the economies of scale to filter through.
A million litres a day i believe. 36 tankers no reloading. Not far from the A30 and 24 hr production.
The use of lorries and drags works well given the farm access, collection sizes and road.
You would really struggle any where west of Taunton with an artic. DC travel past with artic but only pick up 2 farms then drag it all the way back to Davidstow.
 
A million litres a day i believe. 36 tankers no reloading. Not far from the A30 and 24 hr production.
The use of lorries and drags works well given the farm access, collection sizes and road.
You would really struggle any where west of Taunton with an artic. DC travel past with artic but only pick up 2 farms then drag it all the way back to Davidstow.
All the local farms here get lifted by artics, very few lorry and drags seen on the road for DC.
 

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