Covering the seven largest milk buyers in the UK including Arla, Dairy Crest, First Milk, Meadow Foods, Milk Link, Müller, and Robert Wiseman, the report aims to assess the financial health and business direction of these companies on behalf of farmers.
DairyCo, a milk producer organisation, commissioned Bidwells Agribusiness to conduct the study independently in order to help farmers decide which milk buyer is likely to provide the best price and security of demand.
Gwyn Jones, NFU Dairy Board Chairman said: “We would like farmers, and particularly their representatives to look at this report and use it to discuss and question the strategy of their milk buyer, or potential milk buyer, in a constructive way to make sure profits for both parties are maximised.”
Examples of the kinds of question that the DairyCo report attempts to answer for farmers are:
- Which company has a successful, branded cheese and spreads business but lower profitability in its liquid dairies division?
- Which company is focusing on improving efficiency in order to rebuild reserves?
- Which company has a strong balance sheet and ability to generate cash, and is looking to recruit more direct supply?
By answering these questions, and supplying farmers with more information about their buyers, the report aims to make the market work better for farmers who face increasingly volatile milk producer prices. Better informed farmers have the tools to choose between milk buyers and put competitive pressure on processors so they respond better to producer needs.
Dairy UK, the trade body representing milk processors in the UK, also sees positive points in the new DairyCo report.
Jim Begg, the Dairy UK director general, said: “The company-by-company evaluation of Britain’s major milk purchasers underlines the variety and robustness of their businesses.
“I hope this lays to rest the myth that processors aren’t doing enough to secure the industry’s future. I believe it is now clearer than ever that they are working hard for dairy.”
To view the 160-page company strategy report, please click here.