Arla

[Sid]

Morrisons Press release today.

https://www.morrisons-corporate.com...s/morrisons-agrees-milk-deal-with-arla-foods/

Morrisons has agreed a new three-year contract starting in March 2018 that will mean its own-brand liquid milk is provided by Arla Foods.

Morrisons is looking forward to working more closely with their farmers on a range of sustainability and animal welfare measures.

As part of this deal, Morrisons is also committing to further enhancing its regional and local milk offering.

Steve Newbould, Morrisons Head of Trading - Dairy, said: “We believe this agreement will be simpler for our business and will help to develop a sustainable dairy sector.”

Dairy firms sign up for a 3 year contract but they can't tell you how much next months milk price will be!

 

[buffalo_soldier]

Dairy firms sign up for a 3 year contract but they can't tell you how much next months milk price will be!

Not sure but I don't think Morrison's are taking all arlas production.

 

[Sid]

Not sure but I don't think Morrison's are taking all arlas production.

So what??? What %of the milk is sold forward 80%? That gives you a fair indication of price going forward further than 40 days!

 

[farmer on a bike]

So what??? What %of the milk is sold forward 80%? That gives you a fair indication of price going forward further than 40 days!

I think you totally misunderstand how Arla sets it's price. Every month the price is set at a level that they believe it will be until the end of the year, given the known information available at that point in time based on contracts at that point.

A proportion of contracts have some link to the markets, some within countries, some with the EU, some on world markets. 40% is sold as branded products which have to be priced in line with competing products in stores where Arla sell across the world.

Therefore each month changes in prospects for the year end change slightly and the price is altered to reflect that, but each time it is set it is the expectation of what the price will be through to the end of the year given no other changes in the current and any known sales prices going forward.

Arla's year end is December.

 

[Sid]

Therefore each month changes in prospects for the year end change slightly and the price is altered to reflect that, but each time it is set it is the expectation of what the price will be through to the end of the year given no other changes in the current and any known sales prices going forward.

But the price changes every month. How many in the last 12 has it been stand on?
Isn't the balancing bit the 13th payment? I get Arla is a very very complex business and they return as much to the owners/producers asap but from what i take from what you have said is,
1. Brands give better returns but a more erratic due to being fixed to market price short term to be competitive.
2. Longer term commodity give poorer returns but a more stable price with slower fluctuations but larger deviations. You will be in front or behind the market at all times.

The question is what do they members want long term price commitment or short term fluctuations. Balancing both is the key
A 0.25ppl price change in a month is not a significant amount but it adds up.

 

[bar718]

@Sid will always find fault with arla regardless of what the milk price is . For some reason he seems to be on a personal vendetta against arla even though he is not a member and I doubt he would even want to join . Now @foab can give all the detailed answers to any questions @Sid can think of but I can guarantee that in 12 months time this thread or one similar will still have @Sid asking questions about Arla and not really bothering to listen to the answers, but when asked questions about his own milk buyer he cannot or will not give detailed answers .
Strange and worrying that someone is more bothered about another milk buyer rather than there own .

 

[dinderleat]

But the price changes every month. How many in the last 12 has it been stand on?
Isn't the balancing bit the 13th payment? I get Arla is a very very complex business and they return as much to the owners/producers asap but from what i take from what you have said is,
1. Brands give better returns but a more erratic due to being fixed to market price short term to be competitive.
2. Longer term commodity give poorer returns but a more stable price with slower fluctuations but larger deviations. You will be in front or behind the market at all times.

The question is what do they members want long term price commitment or short term fluctuations. Balancing both is the key
A 0.25ppl price change in a month is not a significant amount but it adds up.

I suppose it's up to members and their elected representatives to decide what they want going forward, but currently I Personally think it's working, it's just the fluctuation in the markets that's working against us for a stable price.

 

[Sid]

@Sid will always find fault with arla regardless of what the milk price is . For some reason he seems to be on a personal vendetta against arla even though he is not a member and I doubt he would even want to join . Now @foab can give all the detailed answers to any questions @Sid can think of but I can guarantee that in 12 months time this thread or one similar will still have @Sid asking questions about Arla and not really bothering to listen to the answers, but when asked questions about his own milk buyer he cannot or will not give detailed answers .
Strange and worrying that someone is more bothered about another milk buyer rather than there own .

I wasn't finding fault i was just saying pasing comment which is what forums are about are they?
At the last SW NFU dairy board i sat and listen to ex and present Arla producers moan and moan about them. At an open day i had 3 Arla producers moaning about them. So do you not think its relevant that questions are asked?
As for questions about my milk buyer i will answer questions that i can and not commercially sensitive just like FOAB does about Arla.

I just thought given the spread of markets and risks that the Arla price would have been more stable longer term.

 

[Sid]

I suppose it's up to members and their elected representatives to decide what they want going forward, but currently I Personally think it's working, it's just the fluctuation in the markets that's working against us for a stable price.

Fluctuations are caused by short term contracts or market related pricing for brands?
Long term contracts give stability but are liable to give poorer returns.
Like you said the choice is up to members to steer the company when given all the information.

 

[Fergieman]

I wasn't finding fault i was just saying pasing comment which is what forums are about are they?
At the last SW NFU dairy board i sat and listen to ex and present Arla producers moan and moan about them. At an open day i had 3 Arla producers moaning about them. So do you not think its relevant that questions are asked?
As for questions about my milk buyer i will answer questions that i can and not commercially sensitive just like FOAB does about Arla.

I just thought given the spread of markets and risks that the Arla price would have been more stable longer term.

I would say they are moaning to the wrong people then.

Ask them to speak to their reps. Alot of people to complain and moan about things don't understand what they are complaining about. Alot of producers don't bother to read their contracts and don't understand what their milk buyer wants. (not just within Arla other milk buyers also)

 

[Sid]

I would say they are moaning to the wrong people then.

Ask them to speak to their reps. Alot of people to complain and moan about things don't understand what they are complaining about. Alot of producers don't bother to read their contracts and don't understand what their milk buyer wants. (not just within Arla other milk buyers also)

Some are moaning to the right people, are being listened to but don't like the answers.

 

[Fergieman]

So moaning to the NFU is going to change the answer?

 

[lazy farmer]

Fluctuations are caused by short term contracts or market related pricing for brands?
Long term contracts give stability but are liable to give poorer returns.
Like you said the choice is up to members to steer the company when given all the information.

Fluctuations are caused by short term contracts or market related pricing for brands?
Long term contracts give stability but are liable to give poorer returns.
Like you said the choice is up to members to steer the company when given all the information.

I would agree @Sid price stability = lower prices. crack on

 

[Sid]

So moaning to the NFU is going to change the answer?

We all know that sometimes milk buyers don't listen to their producers/owners/members. Another line of communication probably higher up the chain can be beneficial.

 

[bar718]

We all know that sometimes milk buyers don't listen to their producers/owners/members. Another line of communication probably higher up the chain can be beneficial.

Also some producers / members do not listen as well , the information can be on a web site or even sent out in the post and still some will not read this information then go to somewhere where there is a group of farmers be this a market or meeting and ask questions to someone who has nothing to do with whichever organisation but yet may be sympathetic to there thinking .
This is a problem of not just Arla but all organisations - information transfer is one of the hardest problems to solve there is .

 

[Chips]

The question is what do they members want long term price commitment or short term fluctuations. Balancing both is the key
A 0.25ppl price change in a month is not a significant amount but it adds up.

I listened to a talk by John Duus Andresen and the question of longer term farm gate price commitments was put to him , and his reply was when ever they ran the model to do so ,they always ended up beating the overall price in reality over the course of the fixed period . So the question would have to be to the members do you want a more stable price but less money at the end of the day . I think the response from most including myself would be to put your trust in the sales team that they will always outperform fixed price offers

 

[supercow]

just be yourself @meekers and ul be fine

 

[peclova]

So moaning to the NFU is going to change the answer?

NO - they are nearly useless!

 

[celtis man]

Evening all
just a quick question about last weeks letter about the new seasonality scheme.
has anybody thought to put something in place to protect against a low may price say 14p then to see the b milk worth -9 it could be painful

 

[dinderleat]

Evening all
just a quick question about last weeks letter about the new seasonality scheme.
has anybody thought to put something in place to protect against a low may price say 14p then to see the b milk worth -9 it could be painful

The seasonality would be the least of our worries at 14p. Plus -9ppl is only on your b litres so with the 12month average volume you shouldn't have to many b litres