Milk Link’s 0.5ppl rise as market optimism grows
MILK Link lifted its milk price by 0.5ppl from May 1, and Arla will follow suit in June.
The Milk Link increase will be on the ‘Business Market Related Adjustment’ payable on all litres produced.
It takes Milk Link’s standard litre price to 23.75ppl for those members on manufacturing contracts and 23.97ppl for those on liquid contracts.
Chief executive Neil Kennedy said the new money had come from success in maximising operational efficiencies, taking out cost from the business and improving product and customer mix.
He also said with firmer prices for dairy commodities now evident, there were ‘encouraging signs’ that the wider dairy market was also starting to strengthen.
“As we are able to secure higher returns from the market, we of course will return these to our members.”
Meanwhile, Arla Foods Milk Partnership producers are to receive an additional 0.5ppl from June 1, bringing their standard litre price to 24.5ppl.
Asda suppliers, with their 1.25ppl premium will therefore be on 25.75ppl.
Hanne Søndergaard, deputy chief executive of Arla Foods UK, said: “Market projections suggest that commodity prices will continue to firm throughout 2010.
“This 0.5ppl increase on Arla’s standard litre is based on these predicted returns and is line with our objective of delivering a stable and competitive milk price.”
The NFU views the recent announcements as ‘positive movements at last,but overdue’.
Dairy board chairman Mansel Raymond is determined the trend will continue.
“At last, it seems that milk processors have listened to farmers and acted on market signals, firstly Wyke Farms announcing a 0.75ppl increase acknowledging that dairy commodity prices are accelerating rapidly,” he said.
“This is a welcome improvement, and many other processors have followed this lead – Milk Link and Glanbia both announcing a 0.5ppl increase from May 1.
“With market conditions providing strong grounds for a sizeable increase, there are still a number of questions that need to be asked of those processors that have as yet not moved, or not moved by enough. I will make it my task to ask these questions.
“While the May milk price increases are a step in the right direction, this momentum needs to be continued and sustained by all milk processors.
“These are long overdue movements, and farmers should rightly be asking for much more of the same in coming months.”