Müller Wiseman Dairies has confirmed that its new Müller Wiseman Formula Price, announced last week, will return 32.27ppl in its first quarter, from July to September 2013.
The Müller Wiseman Formula Price will be recalculated on a quarterly basis using publically available benchmarks; Actual Milk Price Equivalent (AMPE), Milk for Cheese Equivalent (MCVE) and a basket of competitor milk prices.
Müller Wiseman Milk Group (MWMG) members who receive the standard milk price can apply to sell a minimum of 10% of their milk volume (based on previous year’s figures) under this new option, with a tender process set to take place during June to gauge demand.
The company has also published analysis to help dairy farmers determine their appetite for an option which links their milk price with global commodities, which have been volatile in the past few years.
The data (see note to editors) shows that in some years the average Müller Wiseman Dairies standard litre price offered to MWMG members would have been ahead of the Müller Wiseman Dairies Formula Price linked directly to global commodity markets.
Pete Nicholson, Agricultural Affairs Manager for Müller Wiseman Dairies said:
“This is a strong opening price which reflects a good period for dairy commodities underpinned by relatively high standard litre prices.
“We think there will be significant interest in this option but we want to stress that the Formula Price will expose dairy farmers to more of the volatility which comes with a direct link with global dairy commodities.
“For example, the average Müller Wiseman Dairies standard litre price last year at 28.27ppl was some 1.69ppl ahead of what the Müller Wiseman Formula Price would have offered had it been available at the time.
“But the first quarter formula milk price from July to September is some 0.77ppl ahead of the current Müller Wiseman Standard Price.”
From July 2013 to March 2014, Müller Wiseman Dairies is offering to purchase 110 million litres of milk using the Formula Price option. Non aligned members of the Müller Wiseman Milk Group have until 21st June to decide whether or not to tender some or all of their milk volume to be purchased in this way.
Further guidelines and a tender document are available from the Farm Services office at Market Drayton on request (01630 650200). If oversubscribed, offers will be scaled back to a minimum of 10% of the previous year’s production (July 2012 to March 2013).
- The launch news release outlining the details of the Müller Wiseman Formula Price is available here: http://www.wiseman-dairies.presscentre.com/Press-Releases/M%c3%9cLLER-WISEMAN-DAIRIES-LAUNCHES-NEW-CONTRACT-AND-FARM-GATE-MILK-PRICE-FORMULA-18b.aspx
- Had the Formula Price been available in the past four years, returns compared to the Müller Wiseman Dairies standard litre would have been as follows:
Year MWD Price (ppl) Formula Price (ppl)
2009/10 24.3 23.49
2010/11 24.7 26.85
2011/12 27.58 27.2
2012/13 28.27 26.58