DECEMBER 2017 NEWSLETTER

Independent representat ion for Dairy Crest Direct DPO

DCD General Manager: Sophie James M: 07879 992099 E: sophie.james@dairycrestdirect.co.uk Your DCD Forum Member: Contact details can be found at www.dairycrestdirect.co.uk

Dairy Crest Farm Business Centre: Freephone: 0800 121 4766 farm.business@dairycrest.co.uk

www.dairycrestd i rect .co.uk

Company Price Month

Arla 31.05 Dec-17

Crediton Dairies 31.00 Dec-17

Meadow Foods 31.00 Nov-17

DC Davidstow Core 30.92 Jan-18

Wyke Farms 30.15 Nov-17

Barber’s 30.08 Jan-18

South Caernafon 30.01 Jan-18

Belton 30.00 Nov-17

Glanbia 29.96 Oct-17

First Milk H’West 29.56 Dec-17

Muller Direct 29.00 Jan-18

Fresh Milk Company 29.00 Nov-17

Arla Direct 28.00 Jan-18

LIQUID LEAGUE TABLE WITH

LATEST DECLARATIONS

4%b/f & 3.3% prot, 30 bacto, 200 SCC, 1mltrs/yr EODC. Excludes seasonality, monthly profile payments, balancing charges, capital deductions, annual/part growth incentive schemes, South Caernafon winter payment and First Milk H’West Tesco Cheese Group Premium. Includes Arla forecast 13th payment.

Oct-17 Sep-17 Nov-16 Nov-17

Bulk Cream £2,180/t £2,830/t £1,990/t £2,100/t

Butter (Unsalted) £5,050/t £6,150/t £3,800/t £4,500/t

SMP £1,350/t £1,525/t £1,850/t £1,270/t

Mild Cheddar £3,365/t £3,450/t £3,080 £3,265/t

Whey Powder €773/t €795/t €886/t -

AMPE 32.7ppl 39.9ppl 31.5ppl 29.2ppl

MCVE 36.6ppl 38.5ppl 33.7ppl 34.9ppl

SNAPSHOT OF AVERAGE WHOLESALE

PRICES & AHDB MARKET INDICATORS

*Please note AMPE/MCVE calculations do not include cost of transport.

Company Price Month

Arla 32.30 Dec-17

DC Davidstow Core 32.00 Jan-18

Wyke Farms 31.22 Nov-17

Wensleydale Creamery 31.20 Nov-17

Barber’s 31.19 Jan-18

South Caernafon 31.03 Jan-18

Glanbia 31.00 Oct-17

Belton 30.75 Nov-17

Cadbury 30.74 Jan-18

First Milk H’west 30.57 Dec-17

First Milk Lake District 30.45 Dec-17

Arla Direct 29.12 Jan-18

Fresh Milk Company 30.03 Nov-17

MANUFACTURING LEAGUE TABLE

WITH LATEST DECLARATIONS

4.2%b/f & 3.4% prot, 30 bacto, 200 SCC, 1mltrs/yr EODC. Excludes seasonality, monthly profile payments, balancing charges, capital deductions, annual/part growth incentive schemes, South Caernafon winter payment and First Milk H’West Tesco Cheese Group Premium. Includes Arla forecast 13th payment.

Sources: Milkprices.com and AHDB Dairy dairy.ahdb.org.uk

JANUARY 2018 MILK PRICE

DCD and Dairy Crest have agreed a milk price hold for January

2018, following negotiation. The Davidstow milk price from 1st

January 2018 will therefore be 32.00ppl for a manufacturing

standard litre and 30.92ppl for a liquid standard litre (standard litre

according to Milkprices.com). The league tables to the left

represent the latest milk pricing announcements on Milkprices.com

at the time of printing.

MARKET UPDATE

AHDB Market Indicators AMPE and MCVE both fell from October

into November, with AMPE down 11% at 29.2ppl. MCVE saw

slightly less of a drop than AMPE, down 5% at 34.9ppl.

Focussing on MCVE, AHDB report that trade in mild cheddar on

spot markets was relatively thin in November. Cheddar stocks are

reported as fairly low, with demand for UK sourced cheese stable.

Although there has been pressure from falling prices for young

cheeses on the continent, according to AHDB last month there

was little trade done in the UK for mild cheddar at lower prices.

Whey powder and whey butter prices decreased by 11% and 12%,

also adding to a lower MCVE.

Wholesale prices for bulk cream and butter saw falls of 4% and

11% respectively, from October into November. Butter trade is

reported as thin, with stocks tight. SMP saw a further drop into

November, down 6% on the previous month and down 31% on the

same time last year. As reported previously, supplies of SMP

remain high and AHDB report that the stronger Euro has put

further downward pressure on prices.

GB milk deliveries for the week ending 18th November were

running 3.7% above the same week last year and significantly

above the AHDB production tracker, which has now been rebased.

If production follows the rebased model, GB production for the

2017/18 milk year will be 2% higher than 2016/17.

Turning to sentiment in the Southern Hemisphere, the latest GDT

auction saw a fourth consecutive fall, by 3.4%.

DAIRY CAMPAIGN

A collaborative industry dairy campaign aimed at

consumers, primarily from the millennial generation,

has recently been launched. Funded by Dairy UK

and AHDB Dairy the campaign includes spoof public

service ads from the fictional ‘Department of Dairy

Related Wholesome Affairs’ and will appear in

papers, on the tube and on billboards across the

country. Materials are being developed to help

farmers become involved in the campaign. More info

here: dairy.ahdb.org.uk/consumer-campaign

DECEMBER 2017 NEWSLETTER

Independent representat ion for Dairy Crest Direct DPO

DCD General Manager: Sophie James M: 07879 992099 E: sophie.james@dairycrestdirect.co.uk Your DCD Forum Member: Contact details can be found at www.dairycrestdirect.co.uk

Dairy Crest Farm Business Centre: Freephone: 0800 121 4766 farm.business@dairycrest.co.uk

www.dairycrestd i rect .co.uk

Dairy Crest Direct Limited, Registered in England and Wales, Company No 5094434

DEFRA ANNOUNCE £40 MILLION PRODUCTIVITY GRANT SCHEME

Defra has announced a new grants scheme for investment in cutting edge technology and new equipment available

to dairy, livestock, arable and horticultural farmers. The grants aim to improve farm productivity through:

• The use of robotic equipment to aid crop and livestock production;

• Increasing the use of renewable energy produced on farm by improving energy storage and distribution;

• The use of LED wavelength controlled lighting to aid crop production;

• More efficient use of livestock slurries and manures, and digestate.

The grants are for a minimum of £35,000 and maximum £1,000,000 and can cover 40% of the eligible costs of the

project. The deadline for applications is 3rd December 2018.

Website: www.gov.uk/guidance/countryside-productivity-scheme and select improving farm productivity.

QUARTERLY FORECASTS DUE

Your quarterly forecast submission is due by Tuesday 19th December 2017.

Our preferred method of submission is through the website, which are growing number of you are using. Forecasts

can also be submitted via email, post or phone. Details for submission can be found on the attached forecast form.

Please note that this is the last time forecast forms will be posted to you, unless you request in your upcoming

forecast submission that we continue to send them.

The DCD predicter tool is now up and running again, apologies to anyone who did have issues accessing the

predicter tool. There was only a 3.3% difference between the overall October forecast volumes and actual

production. It would be fantastic if we could be even more accurate for January.

Thank your for your timely submissions, it is greatly appreciated.

INTL FCSTONE MILKPRICES.COM

UK MILK FUTURES EQUIVALENT (UKMFE)

Jan

05

Jan

07

Jan

11

Jan

09

Jan

08

Jan

13

Jan

12

Jan

10

Jan

06

Jan

14

Jan

15

Jan

16

Jan

17

Jan

18

Jul 0

5

Jul 0

7

Jul 1

0

Jul 0

9

Jul 0

6

Jul 0

8

Jul 1

3

Jul 1

4

Jul 1

5

Jul 1

2

Jul 1

6

Jul 1

7

Jul 1

8

15

20

25

35

45

40

Pen

ce p

er li

tre

UK Milk Futures Equivalent 27/11/17 20/11/17

Jul 0

8

FUTURES UPDATE

The UKMFE results shown in the

graph opposite are derived from

future trades in butter and SMP,

converted to UK ppl equivalents at

the latest exchange rates. The

forward curve, as highlighted by the

green line (Nov ‘17 to Mar ‘19)

currently represents an average

gross UKMFE of 27.36ppl (previously

reported in the November newsletter

at 27.67ppl and 9.16ppl lower than

the August peak of 36.52ppl,

although to December 2018) and

therefore a milk price equivalent of

24.0ppl net to the producer after

taking into account 5% processor

margin and 2ppl ex-farm haulage.

The latest UKMFE was lower than

the previous week, with butter prices

With thanks to Milkprices.com and INTL FCStone for giving permission to DCD to reproduce the UKMFE graph.

in the near months (Dec to Feb) reported to be coming under increasing pressure.