Legislation on milk contracts

[betweenthelines]

Very naive to think that every processor works out what price they can pay farmers without any reference to what other processors pay.

As I have mentioned before, a few years ago OFT did find some processors had acted in collusion to the detriment of the public and multi million pound fines were handed out. Although illegal, this actually meant a more stable supply chain here everyone got a slice of the cake.

The trouble for farmers is that, since then the big retailers decided to sell milk as a loss leader, and the only way processors can get by is by squeezing the farmer.

If legally binding contracts had to reflect COP, it may lead to a price increase to the public (but very few people would reduce purchases on a 1 or 2 ppl increase) but also a lot more stable industry throughout the supply chain, were any increase in overall production could be used to reduce cheese imports.

 

[frederick]

Very naive to think that every processor works out what price they can pay farmers without any reference to what other processors pay.

As I have mentioned before, a few years ago OFT did find some processors had acted in collusion to the detriment of the public and multi million pound fines were handed out. Although illegal, this actually meant a more stable supply chain here everyone got a slice of the cake.

The trouble for farmers is that, since then the big retailers decided to sell milk as a loss leader, and the only way processors can get by is by squeezing the farmer.

If legally binding contracts had to reflect COP, it may lead to a price increase to the public (but very few people would reduce purchases on a 1 or 2 ppl increase) but also a lot more stable industry throughout the supply chain, were any increase in overall production could be used to reduce cheese imports.

If legally binding contracts state above cop.

1 how do you arrive at that figure.

2 the uk retailers would be prepared to import all milk products apart from liquid milk to skirt round the issue.

Poorly managed legislation could finish uk production not support it.

 

[betweenthelines]

If legally binding contracts state above cop.

1 how do you arrive at that figure.

2 the uk retailers would be prepared to import all milk products apart from liquid milk to skirt round the issue.

Poorly managed legislation could finish uk production not support it.

1. Same way as Tesco etc

2.I suggest you spend a few hours at the back door of a supermarket, they can't managing the timing of goods in from their own warehouses 3 or 4 hours away. You'd die of thirst if they had to plan fresh goods deliveries from overseas, even if they could get it at a competitive price, which I very much doubt. Cost upwards of a £/mile to run an hgv.

 

[bar718]

Where does it say that the compulsory contracts legislation will have to pay a price at or above cost of production. No processor will pay more than the markets will pay otherwise they will not last long.

 

[frederick]

1. Same way as Tesco etc

2.I suggest you spend a few hours at the back door of a supermarket, they can't managing the timing of goods in from their own warehouses 3 or 4 hours away. You'd die of thirst if they had to plan fresh goods deliveries from overseas, even if they could get it at a competitive price, which I very much doubt. Cost upwards of a £/mile to run an hgv.

So to set the uk price all dairy farmers are going to give the govt their accounts so that they can work out a national cop.

The retailers dont need to sort the lorries. Arla and muller already manage to deliver the product on time they will just have to ship a bit more.
Why wont the price be competetive. Its already competetive to import a large proportion of european product. Increase the cost of uk product and it will be more competetive to import even more.

 

[Beef farmer]

1. Same way as Tesco etc

2.I suggest you spend a few hours at the back door of a supermarket, they can't managing the timing of goods in from their own warehouses 3 or 4 hours away. You'd die of thirst if they had to plan fresh goods deliveries from overseas, even if they could get it at a competitive price, which I very much doubt. Cost upwards of a £/mile to run an hgv.

7 mile to the gallon. Cost a lot more than a pound

 

[betweenthelines]

Where does it say that the compulsory contracts legislation will have to pay a price at or above cost of production. No processor will pay more than the markets will pay otherwise they will not last long.

My post referred to the time OFT fined processors and retailers for price fixing, clearly demonstrating that the big retailers set the market price at that time and have done so more recently by selling milk as a loss leader

 

[betweenthelines]

7 mile to the gallon. Cost a lot more than a pound

Don't Muller make farmers pay the cost of transport from northern Scotland to Glasgow? What's that, 150 miles with no ferry crossings?
And will only collect within a certain distance of the factory? No fresh milk going into Bridgwater from Cornwall is there?
Ridiculous to talk of fresh milk being imported, let alone the public reaction.

 

[betweenthelines]

So to set the uk price all dairy farmers are going to give the govt their accounts so that they can work out a national cop.

The retailers dont need to sort the lorries. Arla and muller already manage to deliver the product on time they will just have to ship a bit more.
Why wont the price be competetive. Its already competetive to import a large proportion of european product. Increase the cost of uk product and it will be more competetive to import even more.

Why does everyone need to show Govt their accounts? Govt used to set all farm prices (pre EU) based on info from Universities, Accountants etc.

Milk is a relatively, low value, heavy, perishable product that it is neither feasible nor economic to transport large distances

 

[frederick]

Why does everyone need to show Govt their accounts? Govt used to set all farm prices (pre EU) based on info from Universities, Accountants etc.

Milk is a relatively, low value, heavy, perishable product that it is neither feasible nor economic to transport large distances

Because you said a cop could be created same as tesco. Well tesco see all their farmers accounts to create a cop. So to create a national cop some third party would have to see all uk dairy farmers accounts.

 

[westwards]

[QUOTE="organicguy,
Frightening some of the losses this year in the processors.[/QUOTE]
They put up with these losses because they are terrified of loosing big volume contracts and are being screwed over by the retailers !!
Doing a deal with Tesco to hand back money the processors make on cream !!!

 

[westwards]

I was at AgriScot yesterday and did not manage to get to Chris Walkland,s meeting, but I heard Potter had a go at the guy's behind the idea of these contracts.
Who pulls Potter strings ? It seems he wants to see us remain as slaves for the retailers, instead of rubbishing these proposals with his knowledge of the industry and the money he has made out of it, maybe its time he gave something back to the milk producers and worked out a formula that see's everyone in the whole chain getting an equitable share of ALL milk and milk products.
We can't go on jumping through hoops just to be a circus act for supermarket contracts, what other commodity is the same price as it was in 1994 while all other costs have jumped?
If Potter could help come up with some answer's instead of having a pop at guy's trying to find some solution he might even cheer up @RastaBoy

 

[Alfred]

That's not quite true though is it?
Processors can compete with each other for contracts simply by reducing the price paid to their farmer supplier, completely ignoring both market values and marketing opportunities elsewhere.
If Processors had to pay a price, however it was set they could,
1) Charge the customer, more.
2) Innovate,and /or pursue new markets,
3) Stop undercutting other processors with farmers money.

A report that I've just read fits in very well with your point I think? I will follow up your 1. 2. 3.

1) charge the customer more....?
Morrisons have done just that, their putting a increase of 5p on 4pint bottles of milk and a 6p increase on two pint bottles.

2) innovate and persue new markets ...
Morrisons and Arla have done this already with milk for farmers.

3) stop undercutting others with farmers money .....
Interesting to note that the above milk price increase by Morrisons also applies to the milk for farmers range, and what does the label on the bottle of milk say about how much goes back to the farmers ??
The same as it did before! Looks like that increase is going straight into Morrisons pockets, just at the time the farmers who supply their milk get a milk price cut.
Says it all really !

 

[frederick]

A report that I've just read fits in very well with your point I think? I will follow up your 1. 2. 3.

1) charge the customer more....?
Morrisons have done just that, their putting a increase of 5p on 4pint bottles of milk and a 6p increase on two pint bottles.

2) innovate and persue new markets ...
Morrisons and Arla have done this already with milk for farmers.

3) stop undercutting others with farmers money .....
Interesting to note that the above milk price increase by Morrisons also applies to the milk for farmers range, and what does the label on the bottle of milk say about how much goes back to the farmers ??
The same as it did before! Looks like that increase is going straight into Morrisons pockets, just at the time the farmers who supply their milk get a milk price cut.
Says it all really !

If point 3 is correct and farmers milk maintains share its a double win. Morrisons make more selling farmers milk over own label. Shelf space and positioning improves more milk is sold so there are more 10ps made to share out amongst arla members.
Milk is being moved away from commoditised own label to value added brand.

 

[westwards]

I thought you might have something to say about this @nerston

 

[dairyrow]

I think ive read everything

1.theres a problem with all this. Why just fresh milk? surely cheese, yoghurt and other dairy products should be included.

2.how we intergrate all these new producers coming into production. Especially all these sheep and beef guys converting to spring calving herd to produce milk for commodity markets.

3.how do you divide this cop between each producer in the uk

is the arla farmers for milk model really good and dont feel its contributed anything to my bottom line and with these new higher standards being introduced. Youll be paying a premium to farms who arent producing to them standards and less to the farms that are

 

[westwards]

You filling in for Nerston @Coo man ? This is a very important step, as a producer rep its time we heard your's and Muller's views on this topic and if you are not allowed to comment its time @nerston spoke up. The only way to get this right is to get it out in the open and thrash out the views of everone who has a stake.

 

[Coo man]

You filling in for Nerston @Coo man ? This is a very important step, as a producer rep its time we heard your's and Muller's views on this topic and if you are not allowed to comment its time @nerston spoke up. The only way to get this right is to get it out in the open and thrash out the views of everone who has a stake.

Once the consultation is published then we’ll have a view on it but still in the process of meeting the NFUS etc

You filling in for Nerston @Coo man ? This is a very important step, as a producer rep its time we heard your's and Muller's views on this topic and if you are not allowed to comment its time @nerston spoke up. The only way to get this right is to get it out in the open and thrash out the views of everone who has a stake.

You filling in for Nerston @Coo man ? This is a very important step, as a producer rep its time we heard your's and Muller's views on this topic and if you are not allowed to comment its time @nerston spoke up. The only way to get this right is to get it out in the open and thrash out the views of everone who has a stake.

Meeting with NFU shortly

 

[Alfred]

I thought you might have something to say about this @nerston

I have to say @westwards I agree with @cooman. Opinions on what??? It's all been conducted behind closed doors as far as I can see. And I'm very much starting to get the feeling that it's turning into a we know what's best for you sort of approach from the nfu's.
It's all been conducted back to front, farmers representives should have had input from the start.

 

[bigw]

I have to say @westwards I agree with @cooman. Opinions on what??? It's all been conducted behind closed doors as far as I can see. And I'm very much starting to get the feeling that it's turning into a we know what's best for you sort of approach from the nfu's.
It's all been conducted back to front, farmers representives should have had input from the start.

The consultation hasn't started yet and that is the main reason that there has been very little published on the subject. When the time comes then it is going to be important to get milk producers to engage in the dialogue and try and shape a better industry for the future.