Dairy Crest and Milk Link, the southern producers' co-operative, have announced a plan to form a strategic partnership for the Chard creamery. It is set to become "the largest and most efficient butter and milk powder plant in the UK," according to a Milk Link statement. Raw milk collections for Chard will be jointly managed, with the long term aim of extending this arrangement to other Dairy Crest processing sites in the south of England. A major investment programme is in hand to increase Chard's existing annual throughput from 450m litres to 750m. In a classic market analysis, taking an additional 300m litres from the milk pool should put a firmer note in the market. The vigour of the milk powder market continues apace, which has allowed the European Commission to drop subsidy levels for SMP used in animal feed from 35% to 25%. The regulation comes into force in mid-December, but is derogated until the end of the quota year. {{PROVISIONS }}