NFU Dairy Board Chairman Michael Oakes and NFU Chief Dairy Adviser Sian Davies met with representatives from Muller Milk & Ingredients prior to the new contract launch this week.
Muller held a series of producer meetings last year and has made changes to the contract following feedback from farmers and their representatives. Muller suppliers will receive a contract pack from Monday this week, which will include a Muller strategy booklet and the contract documents. Producers are expected to return these by 21st April and the new contract will start on 1st May. The new contract has a single set of terms and conditions for all suppliers.
What's new?
- Notice periods
- Contract variation
- Forecast frequency and accuracy
Muller will require quarterly forecasts and there will be a 7.5% allowance either side on actual production. Muller will work with their farmers to improve accuracy through developing predictor tools.
- Farm Expansion
Each supplier will receive at least 1 visit per year by the farm supply team
- Antibiotic testing and notification
- In conjunction with the Farmer Board, improved flexibility on contract terms to be more agile with market changes
A Muller Ingredients Contract will also launch later this year, which will allow non-aligned farmers to hedge a percentage of their milk volume for 12 months ahead, based on futures markets.
In terms of farmer representation, Muller will be setting up an elected Farmer Forum (21 members) who will then elect 7 farmers for the Farmer Board. The Forum is expected to be in place by April and the Board by July. The term of office will be 3 years and representation is based on milk supplied to Muller, with non-aligned farmers having 9 representatives, and aligned farmers, 12 representatives. This roughly works out as 1 rep per 100 farmers, subject to geography.
The Forum will propose and agree a funding model for the MMG and the level of farmer subscription. They will also decide their future structure – any decision on dPO status will be farmer led.
Muller continue to invest heavily in their UK business and have seen the Brexit vote lead to more retailers looking to source British dairy products. The Muller focus going forward will be through adding value in milk drinks and cream products and through branding their milk offer.