International Contract Launched

UK - First Milk and Eilers & Wheeler have launched an international contract that will pay producers an initial price of 28.5ppl.
calendar icon 5 April 2011
clock icon 2 minute read

In addition, there is a volume bonus in the contract that could see producers with very large volumes earn up to 0.8ppl more.

The companies aim to recruit milk for Westbury from non-First Milk producers, with the margin that First Milk make going back directly to its farmer members.

First Milk’s chairman Bill Mustoe explained: “When you boil it down, our job is to make money for members. Right now with world market prices strong, there is a clear commercial opportunity to put some more cash in the till through getting additional milk through Westbury. Every penny of the margin we make on the international contract will go back directly to members.

“In March we set up a partnership with Eilers & Wheeler to export our cheese around the globe. We have now extended that partnership to cover the purchase of raw milk, the processing of butter and powder and sales of these products on the world market.

Eilers & Wheeler are offering a 3-month rolling international contract with a price tracker mechanism linked to market returns for SMP and butter and based on quoted Dutch prices for both of these products.

The initial price will be 28.5ppl due the current strong market returns and to reflect the inherent risk for producers on these 3-month contracts. Going forward, the price will move up and down based on Dutch market prices.

On top of the standard litre price, there is a volume bonus of 0.1ppl per 1000 litres starting at 8000 litres per day and topping out at 0.8ppl for over 15,000 litres per day.

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