Changes in the producer payments scheme for milk

The volume of milk for manufacture has more than doubled since 1970 and now exceeds that taken by the liquid market. To match producer payments more closely to market realities the MMB will, from April 1984, replace the fat and solids-non-fat compositional quality payment scheme with one based on fat, protein and lactose. In the last 10 years the seasonal trough of production has moved from December to August/September. In an attempt to slow this trend and also provide a disincentive to additional supplies at peak, the MMB is altering its seasonal price adjustments. Milk prices will be increased in August and September and decreased in May and June. The changes in themselves will not affect the total sum of money available to producers, hence most of them will see little difference to their annual income. The exception will be those producers supplying milk of either especially low or high protein and, to a lesser extent, fat content. The change in seasonal adjustments will however cause a noticeable disruption in the cash flow to all producers. The price changes are not likely to produce an immediate management response but should encourage producers to consider critically their existing feeding, breeding and calving policies.