Do You Have That Extra Commercial Factor? National Dairy WeekIn The Spotlight: Profile Adjustment SchemeGet Involved in First Milk Academy First Milk Direct Offers

Features in this issue:

Board Seeks Fresh Talent

FEBRUARY 2010

FEBRUARY 2010

First Milk News

www.firstmilk.co.uk

We recently informed you that we would pay compensation for milk that was run to waste due to the recent prolonged period of extreme weather.

From 1 February, First Milk has confirmed it will no longer pay for milk lost due to adverse weather. You should therefore consider whether to take out insurance to cover such eventualities in the future.

Insurance for Lost Milk

Do you have that extra commercial factor?

With less than two weeks to go, our search for those of you with proven commercial acumen to join our Board is well underway.

“I am delighted that members with a variety of interesting backgrounds and experience have already put themselves forward or been nominated," explained Bill.

“It is fascinating to find out about the hidden talent that exists across our membership and I look forward to hearing from more of you before the deadline."

Bill’s preference, which is supported by the Board, is to reduce the number of elected farmer directors on the Board to three and appoint three more directors from the wider member population. This change requires an amendment to the rules of First Milk and will be put to a members’ vote at the Autumn AGM.

If you would like to nominate yourself or other members with appropriate experience, please email billmustoe@firstmilk.co.uk by 28 February. Timeline 28 February: Deadline for submitting nominations to Bill Mustoe. End March: Selected group to be in place and working with Bill Mustoe. 5 October: Amendment to the rules put to the AGM Conference to change Board composition.

National Dairy Week The many benefits of dairy produce are being promoted during National Dairy Week, which runs from 22 to 28 February.

This year, the activity is focused on a ‘Smile for Dairy’ campaign fronted by Countryfile presenter Julia Bradbury. The campaign will encourage participants to photograph themselves with their favourite dairy product and upload it to the ‘Smile for Dairy’ group on social networking site Facebook. Log on to www.facebook.com

Dairy UK is also lobbying MPs with a Dairy Manifesto, which outlines the key priorities that the next Government needs to address in order to secure the future of the dairy industry. These include urgently tackling bovine TB, promoting the nutritional benefits of dairy produce, increasing research and development

in agriculture to raise productivity and protect UK food security and ensuring that the competition policy allows UK dairy companies to compete on a global scale.

First Milk is taking part by supplying a range of our branded cheddar to radio DJs and journalists and we will be distributing National Dairy Week stickers to you via our hauliers.

To find out more, log on to www.dairyuk.org

Save the Date- AGM Conference 2010Our AGM, Conference & Dinner 2010 will take place on Tuesday 5 October.

This year’s event will be held in Scotland and the venue will be selected shortly. Further details to follow.

FEBRUARY 2010

People Focus Stephen Faulkner Finance Director: Commercial

Transferring to our Profile Adjustment Scheme (PAS) can provide you with a range of financial benefits.

The scheme calculates an annual pence per litre (ppl) adjustment by taking your average daily production during the four Autumn months, September to December and comparing this with the average daily volume of milk supplied in the three Spring months. This comparison then calculates a ppl adjustment, which is applied to every litre throughout the year based on the individual seasonal profile.

The benefits of the PAS include improved cash flow; a level ppl all year round; simple milk price calculation and improved profiles rewarded through a top up payment.

Lancashire member, Maurice Horsfield of Sunny Bank Farm near Colne switched from Dual pricing to the PAS last year after discussing both options with his area manager, Ian Critchley.

“As well as the dairy herd, we run a large sheep flock and we wanted a payment system that would reward us for moving our calving pattern to later in the year to avoid conflict with lambing in the Spring,” explained Maurice. “We also wanted to know what annual effect this would have

on a ppl basis.“The PAS is much clearer as we are

given a straightforward adjustment on every litre from April and this year we achieved a top up payment of over £3500 on our February milk cheque because we supplied more milk in

the Autumn months, so our profile improved from the previous year,” said Maurice.

“We are planning to gradually increase our cow numbers and aim for the extra volume growth to take place later in the year. The PAS allows us to make budgeting easier so we can continue to maximise our milk price,” he added.

www.firstmilk.co.uk

This month, StraightTalk met with Stephen Faulkner to get an insight into his role as Finance Director: Commercial.

My role is to improve the profit generated from the business by supporting the senior management team to make well-informed decisions that enhance our gross margin and deliver the best returns to our members. With over fourteen years of experience in the UK cheese industry, the profitability of the cheese business is currently my main priority.

I am responsible for monitoring our financial performance against

forecasts and assist with controlling our commercial and operational activities to ensure that we identify the most profitable route for every block of cheese that we produce at our factories, while maximising our efficiency.

I have a cross-functional role, working with different parts of the business such as sales, operations and supply chain. I also work closely with our sites and stock planners to ensure that the financial implications of their decisions are properly

challenged and carefully understood.My team provides daily support to

our sales team in their negotiations with our customers, by providing the financial data and insight required to validate proposals. The price we achieve must take account of every single cost from the collection of milk from farm to the delivery of cheese to the customer.

My current focus is to ensure we achieve improved profitability from the 30/60/90 day cheese plans. We have already seen the financial

benefits of a number of these projects starting to filter through. The closure of the Specialist Dairy Ingredients unit at Maelor and subsequently selling bulk whey to Volac is an example of a project that is now driving increased efficiency and returns into our margin.

There is a range of other projects underway in the cheese business and I am responsible for monitoring, controlling and driving the benefits including expanding our customer and product mix by targeting new sales channels and developing our brands, as well as reducing wastage across our sites.

To inject pace to the process of change and ensure that optimal decisions are made in every area of the cheese business, we have established a new centralised management information system. This system allows our business functions to collate the data required to quickly establish the financial viability and make controlled decisions on something as simple as a price change through to a more complex new product launch.

We are already starting to see the financial improvements as a result of the changes that we have implemented and we remain committed to delivering more.

" We are already starting to see the financial improvements as a result of the changes that we have implemented and we remain committed to delivering more."

Stephen Faulkner Financial Benefits Achieved through Profile Adjustments

" The benefits of the PAS include improved cash flow; a level ppl all year round; simple milk price calculation and improved profiles rewarded through a top up payment."

Maurice Horsfield

In the Spotlight: Profile Adjustment Scheme

www.firstmilk.co.ukFEBRUARY 2010

First Milk Academy

First Milk Academy’s ‘Feeding the Dairy Herd’ professional development workshop is being rolled out during February and March, following the successful pilot with farmers from Gloucestershire, Herefordshire and Worcestershire.

The workshop covers a range of issues, which are built around the concept of cow centred feeding and includes costings and practical feeding; forage management; presenting the right feed at the right time in the right way and feeding young stock.

Farm visits to explore forage, feeding systems and their management are also included as part of the workshop.

Gloucestershire member Oscar Seex of Whitley Court Farm near Gloucester attended the pilot in December. “The workshop acted as a valuable reminder of things I already know but also covered a lot of new ground. It was really interesting to speak to other farmers and find out about how they manage their herds,” explained Oscar.

“After completing the course, we are now thinking about adding some wheat to the diet and changing the way we feed young stock,” he added.

There are four workshops due to be delivered by the end of March and there has already been widespread interest.

If you would like to attend a workshop, please contact your area manager.

Feeding the Dairy Herd Workshop Roll-Out

First Milk Academy is an exclusive benefit of being part of First Milk and is available to you and your workforce.

Developed to suit different levels of involvement, the Academy offers informal business club meetings as well as professional development workshops.Business Clubs There are now 45 business clubs established across the UK, run in partnership with DairyCo.

The business clubs provide a forum for you to meet and discuss a range of issues relevant to your businesses, either out on farm or at a local venue. Professional Development Workshops Professional Development Workshops (PDW) offer a more formal approach to learning and

are run one day per week for a four week period for a fee of £80.

These workshops are delivered by Kingshay or the Scottish Agricultural College and are administered by the Royal Agricultural College.

The workshop programme covers a range of issues including lameness prevention; improving fertility; good environmental and agricultural practice; business management; herd health and feeding the dairy herd.

On successful completion of all six workshops, a Higher Education Certificate in Dairy Herd Management is awarded by the Royal Agricultural College.

If you would like to join a business club or attend a professional development workshop, please contact your area manager.

The next round of professional development workshops (PDW) is being delivered during February and March:

Area Manager Workshop Area Dates MobileRoger Poynton Feeding the Dairy Herd Walford Starts 18 February 07813 195204Simon Pitt Feeding the Dairy Herd Ceredigion Starts 23 February 07767 241505Chris Godfrey Feeding the Dairy Herd Derbyshire Starts 10 March 07813 195208Drew Robertson Fertility Dumfries Starts 10 March 07831 610436Peter Llewellin Feeding the Dairy Herd West Wales Starts March 07813 196786Morag Holdsworth Animal Health Ayrshire Starts March 07825 890904Stuart Neish Animal Health Lanarkshire Starts March 07831 610434

If you are interested in attending a workshop, please contact your area manager.

Workshops Coming Up

Dairy farms can lose up to 29% of their herds every year due to health and fertility related issues.

First Milk Academy’s ‘Animal Health and Disease’ workshop has been developed to provide you with a better understanding of animal diseases and their cost implications to help you farm more effectively.

A wide range of issues are covered during the workshop including understanding the disease status of your herd; the effect of the environment on herd health and how you can work more proactively with your vet to reduce health related costs.

By the end of the workshop, you will have developed a herd health action plan tailored to your farm that is practical and easy for you to implement.

There are still places available on forthcoming workshops in Lanarkshire and Ayrshire. If you are interested in attending a workshop, please contact your area manager.

Get Involved in First Milk AcademyFor SalePedigree Holstein Friesian bulls, 15 months old. Contact: Mr Jones, 07980 473543.

2 year old Pedigree Holstein Friesian Bull. Contact: Mr Morgan, Pembrokeshire, 07771 846340.

Wanted100 Cows to lease. Contact: Mr Evans, Ceredigion, 01974 272249.

Find Out About Animal Health and Disease

Carmarthen member Roy Edwards joined the First Milk Direct, Feed Buying Scheme shortly after its launch last October and has since experienced noticeable improvements to his business.

The Feed Buying Scheme is a joint venture between First Milk and leading animal feed manufacturer, BOCM PAULS and offers professional advice and innovative research-based nutritional solutions to address on farm problems, increase output and improve herd health.

As part of the scheme, high quality animal feeds are available at competitive prices and exclusive benefits are available to members

including a loyalty bonus on every tonne of dairy feed purchased.

“One of the main benefits of the scheme is that it is straightforward, so I have less transactions to worry about every month,” explained Roy.

“My milk cheque has also become a margin over purchased feed figure, which allows better financial management of my business. The loyalty bonus paid on all my feed purchases is also a welcome addition to the farm finances,” he added.

Roy has been able to secure the best price for his feed and gain extra credit by paying for the feed when he is paid for his milk, rather than 14 days after delivery. All feed is invoiced directly

through First Milk Direct.For further information,

please contact First Milk Direct on 0141 847 6817.

FEBRUARY 2010

First Milk Direct

Rats cost dairy farmers an estimated £20m a year. As well as consuming over 200 tonnes of feed a day, they contaminate considerably more feed with a range of diseases including leptospirosis, cryptosoridiosis and listeriosis. Most farm fires are also thought to result from rats chewing through electric cables.

First Milk Direct partner, Deosan Chemicals, has launched a new initiative to help farmers reduce the losses associated with rodent infestations.

“Rats are a major nuisance and spread disease which causes feed wastage and physical damage to buildings. Effective rodent control requires a structured approach,” explained Alison Cox, Deosan Field Technical Manager.

“Most dairy farmers take action to control rats after they have identified a problem and then stop control measures once the issue seems to have abated. This reactive approach

simply does not work. Instead, it encourages re-infestation and removes the benefits of a year round control programme,” said Alison.

Deosan has developed a 6Ps approach to help farmers tackle rodent infestations and stay in control:• Planning developing an

appropriate plan for controlling infestations.

• Proofing physical actions to protect buildings and help prevent infestation.

• Prevention cheaper than cure and keeps potential problems at bay.

• Programme implementing a control programme to tackle the problem.

• Positioning getting the right baiting points in the right place.

• Persistence rodent control is not a quick fix. You need to work at it.For further information on

rodent control or any of the Deosan products, please call 0800 013 3044.

The Wholesale Electricity Contract provided through Opus Energy, expires on 31 March 2010.

If you are part of this scheme, First Milk Direct would like to remind you that a termination notice has already been issued to Opus. This means that you must have a new contract in place by 1 April 2010, or Opus will charge out-of-contract rates.

If you have not already signed a new contract, please contact our broker, Saturn Energy on 0844 248 7188, who can provide a quotation and arrange for a transfer to a new supplier.

If you have sourced a contract elsewhere, please contact your supplier to confirm that the transfer will be effective from 1 April 2010, to ensure that you are not liable for any charges by Opus.

Saturn Energy can also provide quotes for those of you not currently purchasing electricity through First Milk Direct. However, if you are approaching the end of a contract, please make sure that the termination notice has been given to your existing supplier, to ensure that you are free to transfer to a new supplier.

For further information, please contact First Milk Direct on 0141 847 6817 or Saturn Energy on 0844 248 7188.

Roy with his eldest son Dafydd and his herd

Control Rat Infestations with Deosan Chemicals

Electricity Contract Reminder

Feed Buying Scheme Makes Life Easier

Fuel Desk ReminderFirst Milk Direct fuel desk can supply gas oil, kerosene, derv and a full range of Shell lubricants nationwide.

Delivery times are now starting to return to normal after the backlog experienced during the extreme weather conditions.

To receive an up to date quotation, please contact the fuel desk on 0141 847 6816.

10% + member discount available First Milk Direct can now offer you the highest quality ear tags at very competitive prices, through leading ear tag supplier Dalton ID systems.

The ‘Supertag’, which is the preferred tag for most cattle breed societies, offers 99% retention rates and replacement tags are now provided free of charge. The ‘Supertag’ is available in three sizes and metal tags can also be ordered as a secondary tag at the same time.

New batches of tags are available at a special discounted price and an applicator will be supplied with all first orders.

Member rates also apply to the I-Tag® electronic button tag, which is available in DEFRA approved or

management versions, FDX-B or HDX to suit all milking parlours.

For further information, request a free catalogue or sample, or to place an order, freephone 0800 838 882. Alternatively, orders can be placed 24 hours a day via www.tags4u.com. Member discounts can be applied online and payments will be charged to your First Milk Direct account. Orders placed before 3pm will be despatched the same day.

Free Replacement Ear Tags

www.firstmilk.co.uk