IN recent months Milk Link has made a number of small but significant steps forward towards our objective of delivering a sustainable future for our members.

In November we announced an increase in our "B" price for milk for the first five months of 2007 and then in early December the first trading of Milk Link Qualifying Loans Certificates successfully took place. Finally, in late December we announced that we had acquired the final 25 per cent of The Cheese Company from Glanbia giving us 100 per cent ownership of the largest cheese producer in the UK.

In mid-November we announced that we were going to incentivise "non-core" production by increasing our "B" milk price for the first five months of this year, under the "A & B" pricing system. The increase will be worth at least 0.15ppl to the average member, whilst some will benefit more. This move gives members the confidence to increase production and thus profit from the recent strengthening of the powder and whey markets.

Early December saw the first trading of Milk Link's Qualifying Loan Certificates. These certificates have both capital and income rights and were allocated on the balance on the Member Capital Account as at March 31, 2006. There was a significant volume of trading with certificates trading around 80-85 pence each. The trading dates are quarterly with the next trading date in early March.

Finally, at the very end of December, the purchase of the remaining 25 per cent of The Cheese Company was completed. The original terms of The Cheese Company joint venture between Glanbia and Milk Link contained a restriction on the distribution of profits until Glanbia had been fully repaid (scheduled for 2018 at the latest). Milk Link's early repayment of Glanbia has removed these restrictions, so allowing part of the profits of The Cheese Company to be returned to Milk Link and processing profits from cheese can now flow back to members.

The Cheese Company is a considerable asset for Milk Link's members, with profits before tax of £5.6 million for the period ended April 1, 2006. With strong positions in cheddar, stilton and British territorial cheeses, and customers in the retail, food service and ingredient sectors, its high-quality cheeses are much appreciated and won over 250 awards in 2006.

The company is aiming to build on its achievements in 2007, with plans to launch new products onto the market, so broadening range and building sales.

Added to all of this, it is interesting to consider how far Milk Link has come in a relatively short space of time. Milk Link's status as a leading dairy processor was recognised at the launch of the 2007 West Country Business Guide on January 9, where we were ranked as the largest co-operative and third largest food and drink manufacturer in the South West. Milk Link was also named as the region's 31st largest company overall. This is a significant achievement, considering that Milk Link only started trading in April 2000.

Although dairy farmers continue to face significant challenges, Milk Link members realised five years ago that maintaining the status quo was not an option and made difficult decisions which are now starting to bear fruit. Their foresight means that they are now the sole owners of one of the largest milk processing businesses in the UK.