Milk Link, Another Processor Drops Farmgate Price09 May 2012
UK - The Milk Link Board has announced a reduction in its Member milk price of 1.5 pence per litre (ppl) from 1st June. The Board says that the decision reflects the significantly weaker returns being generated from the dairy ingredients and fresh liquid milk markets. Milk Link follows in line other European processors who have also recently dropped prices.
Neil Kennedy, Milk Link Chief Executive commented, “Although our price cut is less than most other major milk buyers, we recognise that the resulting drop in farm income will increase further the financial pressure on our Members’ dairy enterprises. As such, to give Members some stability during this very volatile period, the Board has agreed that the June price will be held for both July and August.
“In the meantime, we will of course remain totally focused on identifying opportunities to generate greater returns from the market and further reduce costs within our business and on passing the benefits of this back to our Members as soon as possible.”
At the same time, the Milk Link Board also confirmed that its Member Processing Interest Payment relating to the 2011/12 financial year will be £5.95 million. This is an increase of £2 million compared to the previous year and equates to a 12.8 per cent return on Members’ Qualifying Loan balances. The Processing Interest Payment will arrive in Members' bank accounts on 31st May and will, on average, be equivalent to c.0.58ppl across the total volume of milk supplied in the prior year.
Commenting further Mr Kennedy said: “The payment rewards the investment and commitment of our Members in building a major, added value dairy products business and demonstrates the solid performance of the business over the last 12 months despite the very difficult market conditions all in the dairy industry have faced.
“Although the increase in the Processing Interest Payment is welcome I would like to reiterate that our main focus is on returning a sustainable milk price to our Members. As such, I and the rest of the Milk Link Board regard this as our absolute priority and we are determined to shelter our Members from the impact of what are very challenging economic and trading conditions.”
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