Milk Price Tracker

[lazy farmer]

I am sure this has been addressed before, but does anyone ever see this headline price (apart from Jerseys)?

if people aren't achieving the headline price before seasonality then they need to be looking at their breeding and feeding before complaining about ARLA or find themselves a liquid buyer.

 

[stablegirl]

if people aren't achieving the headline price before seasonality then they need to be looking at their breeding and feeding before complaining about ARLA or find themselves a liquid buyer.

Lazy, or anyone, where would you think your annual components would be before you were better with a liquid contract?

3.8% 3.0% ?

 

[frederick]

Lazy, or anyone, where would you think your annual components would be before you were better with a liquid contract?

3.8% 3.0% ?

Put it the other way round if your on a manufacturing contract why would you not be aiming to reach 4.1 3.3 at a minimum in the long term.
Plus 4 fat to me would mean good diet with low risk acidosis. 3.3 protein would be my understanding of good energy balance to achieve better fertility.

 

[lazy farmer]

Lazy, or anyone, where would you think your annual components would be before you were better with a liquid contract?

3.8% 3.0% ?

As @frederick said firstly I would be trying to improve my product before looking to move contracts however if all else fails then I would be balancing up prices being paid by local liquid buyers their other requirements their history of looking after their producers against the security that a coop such as ARLA provides and their promise to pick up every litre you produce.
As to your basic question I would be looking at others standard litre price and comparing them I think some have penalties if your quality is too low.

 

[endeavour]

Informed comment,
Oh that a larger % of producers acknowledged the pitfalls in solely looking at headline std litre price often including bonuses they will not achieve, and penalties for cell count or bactoscans average farmers encounter at some time during a year. Transparency of terms within the contract is vital and past history a must . Milk contracts do not hold a"Buyer Beware" warning but should have a "PRODUCER BEWARE" warning on their outer covers.

 

[dogglercowman1]

Why was it so low? You either had very low solids, or a low base with lots of seasonal litres at 60% of price? Are you a seasonal calver? There is a reason other than Arla are rubbish at the moment!

Bf 3.9 pro 3.17....all top bands....eodc and 20% of milk as seasonal litres .....so not excessive..but still a well crap price

 

[lazy farmer]

Bf 3.9 pro 3.17....all top bands....eodc and 20% of milk as seasonal litres .....so not excessive..but still a well crap price

But both your fat and protein are well below standard litre requirements

 

[Cows 'n grass]

@lazy farmer

Hows Barbers price now? I remember they announced 30p at the beginning of the year, have you guys had any cuts since then?

 

[lazy farmer]

Yeah we have had 1 cut. Currently you are .12 ahead of us. However and another thing arla white water producers forget is that a large portion of your price is fixed which is madness on my opinion as it penalises those that produce more of what arla want. Where as with barbers 95% of my milk price is down to me and the solids I produce. I am responsible for my milk price.

 

[stablegirl]

Lazy i think you mean the base price bit?

If so there is very little on that now, and only on the liquid contract which will be defunct at xmas.

 

[lazy farmer]

Your. Right sorry
What I was trying too
Say is the fixed part insulates those with below standard milk from its true value

 

[peclova]

The average payout from Arla in May was within 0.2 ppl of the headline price pre seasonality , given that seasonality is cash neutral to the UK I think that is pretty darn good given arla have no control over Milkprices.com standard litre nor the constiuents that Arla farmers send in each month . Averages aside , the vast majority of members also recieved with in plus minus 1p of the headline price and the vast majority of farmers would not be Jerseys or block calving

That is reassuring to know. Thank you.

 

[peclova]

if people aren't achieving the headline price before seasonality then they need to be looking at their breeding and feeding before complaining about ARLA or find themselves a liquid buyer.

The reason I originally asked about how realistic the Arla (or any buyer's for that matter) Headline price is because I was interested in knowing if that was based on realistic expectations. When I look at my benchmarked Fat & Protein data and compare that to what I actually receive against the headline price I am always adrift. Furthermore we are always in top bands for Bacto and SCC.

The May headline price was 28.13p/ltr yet all I received into my bank account was 24.64p/ltr. Admittedly our BF is lower than the Arla UK average, but P was higher and there was no seasonality adjusted supply.

 

[lazy farmer]

The reason I originally asked about how realistic the Arla (or any buyer's for that matter) Headline price is because I was interested in knowing if that was based on realistic expectations. When I look at my benchmarked Fat & Protein data and compare that to what I actually receive against the headline price I am always adrift. Furthermore we are always in top bands for Bacto and SCC.

The May headline price was 28.13p/ltr yet all I received into my bank account was 24.64p/ltr. Admittedly our BF is lower than the Arla UK average, but P was higher and there was no seasonality adjusted supply.
View attachment 539266

very interesting what is the base BF and protein with ARLA ?

 

[farmer on a bike]

The reason I originally asked about how realistic the Arla (or any buyer's for that matter) Headline price is because I was interested in knowing if that was based on realistic expectations. When I look at my benchmarked Fat & Protein data and compare that to what I actually receive against the headline price I am always adrift. Furthermore we are always in top bands for Bacto and SCC.

The May headline price was 28.13p/ltr yet all I received into my bank account was 24.64p/ltr. Admittedly our BF is lower than the Arla UK average, but P was higher and there was no seasonality adjusted supply.
View attachment 539266

There has to be a reason. The price of 28.13ppl was the manufacturing headline price for 4.2 BF & 3.4 P. Firstly did you get 24.64p per litre or per Kg?

To get the standard price you have 4.2 x 2.954 =12.4068 + 3.4 x 14.0624 -1.049= 25.4202ppkg raw milk then top bacto and SCC is each +2% so that adds 0.5084 and 0.5084, then add 0.5 for average vol bonus and take away -0.138 for average basic cost = 26.799ppkg then add expected 13th payment of 0.78 = 27.579ppkg x 1.02 = 28.13ppl. Obviously any seasonal litres reduce this in May. This is for 1 million kg, it will be less if you are lower as the vol bonus will be less and basic cost reduction more (as it is a fixed charge per farm in £)

Where are you missing out in this? I guess if you came through AFMP/ or even more recently you may still have a capital deduction.

 

[applejack]

Well there you go @peclova ,just need a degree in maths.Does it really need to be so complicated?

 

[farmer on a bike]

Well there you go @peclova ,just need a degree in maths.Does it really need to be so complicated?

It is almost exactly as Milklink was except for kg, not sure what is particularly difficult it is just Fat + Protein-volume +Bacto & SCC + volume - per farm charge + 13th payment. Adding, subtracting, multiplication and percentages are what 12years should be able to do, hardly degree level is it.

 

[Scholsey]

There has to be a reason. The price of 28.13ppl was the manufacturing headline price for 4.2 BF & 3.4 P. Firstly did you get 24.64p per litre or per Kg?

To get the standard price you have 4.2 x 2.954 =12.4068 + 3.4 x 14.0624 -1.049= 25.4202ppkg raw milk then top bacto and SCC is each +2% so that adds 0.5084 and 0.5084, then add 0.5 for average vol bonus and take away -0.138 for average basic cost = 26.799ppkg then add expected 13th payment of 0.78 = 27.579ppkg x 1.02 = 28.13ppl. Obviously any seasonal litres reduce this in May. This is for 1 million kg, it will be less if you are lower as the vol bonus will be less and basic cost reduction more (as it is a fixed charge per farm in £)

Where are you missing out in this? I guess if you came through AFMP/ or even more recently you may still have a capital deduction.

Even carols confused!

 

[Smiler]

It's not that difficult and it rewards those that produce higher value milk as it should do.

 

[peclova]

There has to be a reason. The price of 28.13ppl was the manufacturing headline price for 4.2 BF & 3.4 P. Firstly did you get 24.64p per litre or per Kg?

To get the standard price you have 4.2 x 2.954 =12.4068 + 3.4 x 14.0624 -1.049= 25.4202ppkg raw milk then top bacto and SCC is each +2% so that adds 0.5084 and 0.5084, then add 0.5 for average vol bonus and take away -0.138 for average basic cost = 26.799ppkg then add expected 13th payment of 0.78 = 27.579ppkg x 1.02 = 28.13ppl. Obviously any seasonal litres reduce this in May. This is for 1 million kg, it will be less if you are lower as the vol bonus will be less and basic cost reduction more (as it is a fixed charge per farm in £)

Where are you missing out in this? I guess if you came through AFMP/ or even more recently you may still have a capital deduction.

Farmer on a Bike,
Thank you, as always, very informative.

My 24.64p is per litre not kg; that is 24.16p

In this case we are still paying off capital contribution at 1.00ppl and are likely to be doing so for some considerable time. Our basic cost, as a small producer, typically equates to 0.52ppl. Plus we don't get any volume bonus. If I add those factors to the 24.64ppl I would see something like 26.66ppl. Adding your expected 13th Payment of 0.78ppl that brings the ppl to 27.44ppl. Then there is the AHDB levy of 0.060ppl (which I assume has to be added back as well). We are now up to 27.50ppl. The remaining difference must therefore be down to a lack of constituents; only BF in my case.

For me, there are two problem with the headline or standard rate. Firstly the 13th Payment, which (rightly or wrongly) I regards as a Return on Capital Invested and not a deferred payment for the milk supplied. The second problem involves the BF% & P% used in calculating the standard price. Based on the benchmark data provided on the Arla website, the "company" (Arla) average BF clearly is not 4.2% or anything approaching it. BF% only briefly tips over 4.2% in late October and early November. It also appears, from the benchmark data, that an average Protein of 3.4% was never achieved during the last 12 months.

My conclusion is, either the benchmark data is incorrect or the constituents used for calculating the headline or standard price are too high.