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Thread: Arla

  1. #481

    Re: Arla

    Quote Originally Posted by dinderleat View Post
    .74ppl increase to 33.83ppl should make it 34.58ppl but it doesn't as they are saying the on account price will be 34.25ppl? FOAB any help to explain to a simple farmer.

    Arla want to show one standard price for both AmCo and AML. So although your price will go up in line with the increase as it always has, the standard litre looks a bit different. AML has still has about 14 different contracts, although most are either based n the manufacturing or the London liquid. In the past each has had a standard litre price, now Arla are only quoting one. In simple terms the AML (&AMCo) on liquid contracts will see an increase of 0.74ppl, those on constituent contracts will see a similar increase but paid on the constituents, so more than 0.74 ppl for the higher constituent milk and less than 0.74ppl for the lower constituent milk.

    In the letter there is also a comment about the higher price leading to a lower 13th payment. This is because 3% of gross income is collected. Out of that the equivalent of 4.5% of the paid out price is 'consolidated', in other words retained for reinvestment. Therefore if the price goes up more money will be consolidated. If costs of running the business remain the same, then there is a bit less left to pay out.

    For example if the business gets 80p litre for milk sold. 3%=2.4ppl. If it pays out 30ppl then 4.5%of 30p is retained=1.35ppl. So the difference 2.4-1.35 is paid out as 13th payment=1.05ppl.

    If the price rises by 10ppl. The business gets 90ppl for milk sold. 3%=2.7ppl. The milk price paid rises to 40ppl then 4.5% of 40 ppl is 1.8ppl. So the difference 2.7-1.8 is 0.9ppl. So the 13th payment has fallen.

    It is possible that this year the production cost could fall, partly due to action being taken in the business (for example Aylesbury's opening reducing costs) and particularly with reduced fuel costs which makes the effect even stronger. The other issue is any changes to the proportion of milk due to receive the 13th payment.

    it is possible that the BoR could decide to lower the consolidation % for this year, but maybe it is better to invest more in a good year and less in a bad year.

    There should be a round of member meetings in late March where this can be better explained.

  2. #482
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    Re: Arla

    Quote Originally Posted by Farmer on a bike View Post
    Arla want to show one standard price for both AmCo and AML. So although your price will go up in line with the increase as it always has, the standard litre looks a bit different. AML has still has about 14 different contracts, although most are either based n the manufacturing or the London liquid. In the past each has had a standard litre price, now Arla are only quoting one. In simple terms the AML (&AMCo) on liquid contracts will see an increase of 0.74ppl, those on constituent contracts will see a similar increase but paid on the constituents, so more than 0.74 ppl for the higher constituent milk and less than 0.74ppl for the lower constituent milk.

    In the letter there is also a comment about the higher price leading to a lower 13th payment. This is because 3% of gross income is collected. Out of that the equivalent of 4.5% of the paid out price is 'consolidated', in other words retained for reinvestment. Therefore if the price goes up more money will be consolidated. If costs of running the business remain the same, then there is a bit less left to pay out.

    For example if the business gets 80p litre for milk sold. 3%=2.4ppl. If it pays out 30ppl then 4.5%of 30p is retained=1.35ppl. So the difference 2.4-1.35 is paid out as 13th payment=1.05ppl.

    If the price rises by 10ppl. The business gets 90ppl for milk sold. 3%=2.7ppl. The milk price paid rises to 40ppl then 4.5% of 40 ppl is 1.8ppl. So the difference 2.7-1.8 is 0.9ppl. So the 13th payment has fallen.

    It is possible that this year the production cost could fall, partly due to action being taken in the business (for example Aylesbury's opening reducing costs) and particularly with reduced fuel costs which makes the effect even stronger. The other issue is any changes to the proportion of milk due to receive the 13th payment.

    it is possible that the BoR could decide to lower the consolidation % for this year, but maybe it is better to invest more in a good year and less in a bad year.

    There should be a round of member meetings in late March where this can be better explained.
    thanks FOAB shouldn't need to go the meeting now.

  3. #483
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    Re: Arla

    Thankyou fob , excellent service as always, im sure that all that stuck with arla milk link are happy now?!

  4. #484
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    Re: Arla

    Anyone else slightly concerned that this may be tactical (running up to end of March), and 'could' be downhill thereafter?

    Crystal Ball anyone?

  5. #485
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    Re: Arla

    Quote Originally Posted by Einstien View Post
    Anyone else slightly concerned that this may be tactical (running up to end of March), and 'could' be downhill thereafter?

    Crystal Ball anyone?
    Arla will find it difficult to be tactical in a uk sense as this is a European price rise. Wether it can be held through april will be interesting. Technically it is not a huge price rise due to the amount the 13th payment has reduced but it is more up front money in my pocket I am not complaining.

    If the money is coming in it needs distributing. The advantage of a co op.
    It will be suprising however if these global values can be held if the eu is awash with milk in april and may.

  6. #486
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    Re: Arla

    Hear so many different stories about arla and their prices and speculations. What happens to this 13th payment will farmers see it or does it go into a so called loan account.

  7. #487

    Re: Arla

    Quote Originally Posted by hanspree View Post
    Hear so many different stories about arla and their prices and speculations. What happens to this 13th payment will farmers see it or does it go into a so called loan account.
    If you are with AML you will get paid it next March on all of litres from Jan to Dec 2014. If with AmCo it goes into your capital account to meet your entry requirements, if you leave it will be paid back to you.

  8. #488
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    Re: Arla

    well the power of arla is certainly being felt in my milk field in somerset. there latest price rise has forced a response from my buyer price up a 1pto 33.6 from feb onwards cant see a price fall this side of the summer. but what do I know.................

    lazy

  9. #489

    Re: Arla

    Quote Originally Posted by Farmer on a bike View Post
    If you are with AML you will get paid it next March on all of litres from Jan to Dec 2014. If with AmCo it goes into your capital account to meet your entry requirements, if you leave it will be paid back to you.
    Do you get your money back from both the individual and common consolidation accounts if you leave?

  10. #490

    Re: Arla

    Quote Originally Posted by bramble View Post
    Do you get your money back from both the individual and common consolidation accounts if you leave?
    Only the individual. But all of the money AmCo members receive as 13th payment goes towards the individual account.

    AmCo members have had to make a 2p contribution to the common consolidation, for some that is money carried over from AFMP, for new members it is a deduction from milk price.

    Going forward,(2016 for AML members maybe slightly different for AmCo) the milk price will also include extra money added to your individual consolidation of approx 0.5ppl which will also be handed to you if you leave.

  11. #491

    Re: Arla

    Quote Originally Posted by Farmer on a bike View Post
    Only the individual. But all of the money AmCo members receive as 13th payment goes towards the individual account.

    AmCo members have had to make a 2p contribution to the common consolidation, for some that is money carried over from AFMP, for new members it is a deduction from milk price.

    Going forward,(2016 for AML members maybe slightly different for AmCo) the milk price will also include extra money added to your individual consolidation of approx 0.5ppl which will also be handed to you if you leave.

    And the individual account only goes to a maximum of 5ppl? Everything above this ends up in the 'common' pot and is non-returnable? Is it likely that the individual account limit will be increased over time to reflect the current split between individual and common consolidation pots, or will future monies just get paid into the common pot once the individual account limit is reached?

  12. #492

    Re: Arla

    Quote Originally Posted by bramble View Post
    And the individual account only goes to a maximum of 5ppl? Everything above this ends up in the 'common' pot and is non-returnable?
    No quite the opposite, as it stands once the 5ppl is reached any excess is paid out with the 13th payment.

    Is it likely that the individual account limit will be increased over time to reflect the current split between individual and common consolidation pots
    The consolidation policy is up for review, to start late this year, no proposals have yet been made. I would not be surprised if the 5ppl limit was increased, but I would be shocked if the amount paid into common consolidation each year was increased. Having listen to views in the Board of Representatives over the last 16months, I can see no way that would pass.

  13. #493
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    Re: Arla

    Quote Originally Posted by lazy farmer View Post
    well the power of arla is certainly being felt in my milk field in somerset. there latest price rise has forced a response from my buyer price up a 1pto 33.6 from feb onwards cant see a price fall this side of the summer. but what do I know.................

    lazy
    Really that some what behind what was quoted on the other side? Talk of 37 ppl averages?

  14. #494
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    Re: Arla

    Quote Originally Posted by Sid View Post
    Really that some what behind what was quoted on the other side? Talk of 37 ppl averages?
    that's the base price with our quality would expect to get at least 10% more over the season as a whole so yes 37p+ perfectly possible.

    lazy

  15. #495
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    Re: Arla

    Anyone notice this headline in today's Farm Business magazine?




    If only!
    British Farming Forum on Facebook - www.facebook.com/groups/BritishFarmingForum

  16. #496
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    Re: Arla

    Quote Originally Posted by Sam_TM View Post
    Anyone notice this headline in today's Farm Business magazine?




    If only!
    That would be nice!!

  17. #497
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    Re: Arla

    Delighted to hear today's news that Arla made £250 million profit in 2013 and that the performance price is expected to increase from 33.91p/kg in 2013 to between 36.1p/kg and 37.3 p/kg in2014.

    http://www.farmersguardian.com/home/.../62424.article

  18. #498

    Re: Arla

    FOB can you tell me why the last price rise was in euro cent rather than Danish ore. Doesn't make any difference but is it a chance in policy?

  19. #499

    Re: Arla

    Quote Originally Posted by Cornishfarmer View Post
    FOB can you tell me why the last price rise was in euro cent rather than Danish ore. Doesn't make any difference but is it a chance in policy?
    To the BoR the board/ execs have usually quoted price changes in euro cents. Although they will tend to quote the performance price in Danish Ore. I think it was just how the UK business decided to write the latest letter. Nicola and her team have been trying hard to improve communication and I personally think euro cents are more understood by a UK farmer than Danish ore, so it seems a slightly better way to report it. I think the reason it is reported in both ppl and €cents/ ore is to show how everybody in arla gets the same.

    As I guess you realise the Danes aim to peg the Danish ore to the euro so in reality it makes no difference.

  20. #500
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    Re: Arla

    Wisemans and Dairy Crest feeling the squeeze



    http://www.farmersguardian.com/home/.../62458.article

    Unbelivable!!! They've controlled the milk price for the last 20 years and paid no more than necessary, now the boots on our foot they start to squeal. There's 2 ways to join arla, 1 as a full paid up member which doesn't come cheap, the other as a direct supplier which i think has the 3 month notice period, can't see what the problem is!

  21. #501
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    Re: Arla

    Quote Originally Posted by goldtop View Post
    Wisemans and Dairy Crest feeling the squeeze



    http://www.farmersguardian.com/home/.../62458.article

    Unbelivable!!! They've controlled the milk price for the last 20 years and paid no more than necessary, now the boots on our foot they start to squeal. There's 2 ways to join arla, 1 as a full paid up member which doesn't come cheap, the other as a direct supplier which i think has the 3 month notice period, can't see what the problem is!

    According to that article DC and MW claim it's not right farmers can't leave ARLA with 3 months notice under the voluntary code. But who would want to leave when ARLA are paying a far better price.

  22. #502
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    Re: Arla

    The cashflow in both of these businesses for the spring must be looking quite serious for them to dig this up.

    Mueller Wiseman have always only had 3 month notice and have been proud of this and said it demonstrates their intention to perform within the market. If they want to follow the voluntary code perhaps they should ammend their contract to the same as dairy crest in it is 12 months notice unless the milk price moves, I'm sure though they would have much more difficulty in selling a 12 month code compliant contract than Arla appear to currently have with a none compliant contract with a further requirement to commit capital to the business.

    Dairy Crest were the first to sign up to the code which was good on them but I don't think they ever expected to be in the position that they were frightened to put up the milk price because that would still result in a storm of 3 month notices being given.

    All this voluntary code contract business is a nonsense, it is milk price and faith in the company that matters. If that faith is lost people will move just some can move quicker than others.

    Big Phillip you appear to have gone quiet recently on the current state of the industry after having had quite a lot to say at the end of last year.

  23. #503
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    Re: Arla

    Only farmers could find fault with what is a geniune point a competitor has made, and which acts to their advantage. Surely there should be unilateral rules to which all players should abide.

    Would you rather they did away with the voluntary code then?

  24. #504
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    Re: Arla

    Quote Originally Posted by nickson View Post
    The cashflow in both of these businesses for the spring must be looking quite serious for them to dig this up.

    Mueller Wiseman have always only had 3 month notice and have been proud of this and said it demonstrates their intention to perform within the market. If they want to follow the voluntary code perhaps they should ammend their contract to the same as dairy crest in it is 12 months notice unless the milk price moves, I'm sure though they would have much more difficulty in selling a 12 month code compliant contract than Arla appear to currently have with a none compliant contract with a further requirement to commit capital to the business.

    Dairy Crest were the first to sign up to the code which was good on them but I don't think they ever expected to be in the position that they were frightened to put up the milk price because that would still result in a storm of 3 month notices being given.

    All this voluntary code contract business is a nonsense, it is milk price and faith in the company that matters. If that faith is lost people will move just some can move quicker than others.

    Big Phillip you appear to have gone quiet recently on the current state of the industry after having had quite a lot to say at the end of last year.
    Im always quiet !! Word on street is that next Tuesday there will be more big news from arla which will leave the uk milk industry stunned !!

  25. #505
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    Re: Arla

    Quote Originally Posted by big philip View Post
    Im always quiet !! Word on street is that next Tuesday there will be more big news from arla which will leave the uk milk industry stunned !!
    Price movement would of thought bod's had a meeting on Thursday probably get a letter on Tuesday.

  26. #506
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    Re: Arla

    Quote Originally Posted by dinderleat View Post
    Price movement would of thought bod's had a meeting on Thursday probably get a letter on Tuesday.
    In which direction? Have heard comments of a price crash towards the end of the year as cheese manufacturers are paying too much for milk compared with market returns.

  27. #507
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    Re: Arla

    Quote Originally Posted by RED BULL View Post
    According to that article DC and MW claim it's not right farmers can't leave ARLA with 3 months notice under the voluntary code. But who would want to leave when ARLA are paying a far better price.
    I would still be cautious - Look at the rolling 12 month ppl league table - Even though ARLA now paying well (surprise surprise as we are close to the termination date for a load of contracts) they are still bottom of the table in terms of what they have paid out over the last 12 months.

    My gut feeling is that market forces will just force the price up short term, then we'll be back where we were before we know it!

  28. #508
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    Cool Re: Arla

    Quote Originally Posted by goldtop View Post
    Wisemans and Dairy Crest feeling the squeeze


    http://www.farmersguardian.com/home/.../62458.article

    Unbelivable!!! They've controlled the milk price for the last 20 years and paid no more than necessary, now the boots on our foot they start to squeal. There's 2 ways to join arla, 1 as a full paid up member which doesn't come cheap, the other as a direct supplier which i think has the 3 month notice period, can't see what the problem is!

    we left Arla end of last June and it was the BEST decision we as a business ever made. Our milk cheque each month has been £5K plus, we have been able to increase our herd something that Arla never let us cause of that bludy BADP set up.

    Our current milk buyer may not be above Arla's headline busting ppl, but when you take all their deductions off its lower than ours, they not tell you that in the do they!!!!
    They have been very helpful in getting us to increase and each month they are there to help not hinder.

    It make me quite mad that people go on about how wonderful Arla are, but i can tell you from experience, that Mr Ovens sat at our kitchen table to try and get us to stay when we handed our notice in and LIED through his teeth! He is full off smelly stuff to put it politely.

    It may be right for some people but Arla have certainly left a very bad taste in our mouths and anyone thinking of joining them should really do their homework before signing on the dotted line.

  29. #509
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    Re: Arla

    Quote Originally Posted by RED BULL View Post
    According to that article DC and MW claim it's not right farmers can't leave ARLA with 3 months notice under the voluntary code. But who would want to leave when ARLA are paying a far better price.

    what even after all their lovely deductions!!!!!!

  30. #510
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    Re: Arla

    Quote Originally Posted by mid wales taffy View Post
    what even after all their lovely deductions!!!!!!
    DC are good at deductions too - fact is Arla as a cooperative will return a price which is truly market related, in good times and others. DC are crapping themselves because the minute they move on price, either way, the floodgates will open.

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