British dairy co-op delays milk payment by two weeks

First Milk has announced a series of measures to help deal with pressure on their cashflow in a very difficult dairy market.
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Dairy farmers in Britain have reacted with shock to the news that a farmer owned dairy co-op is delaying milk payments by two weeks as part of a series of measures to deal with financial pressure.
First Milk, which has 1,300 farmer suppliers, blamed its issues on the 50% collapse in dairy market returns over the past year.
The co-op has announced that milk payments due on 12 January will be deferred by two weeks to 26 January. Until further notice, all payments will be deferred by two weeks.
The only good news for British farmers is that February milk price cuts will change from 2.43ppl and 1.6ppl for the manufacturing and liquid pools respectively to 1.33ppl and 0.5ppl, a reversal of 1.1ppl. However, the capital contribution farmers pay to the co-op will increase from 0.5ppl to 2ppl for milk supplied between December 2014 and August 2015. Angry farmers have described this as «a retrospective price cut for December and January milk». Furthermore, the member’s capital investment target will increase from 5 to 7ppl.
First Milk is paying a little over 20p (25.5c) per litre for January milk, well below other processors in the market.
In their announcement this morning, First Milk stated that the measures announced aim to «deliver a cash injection into the business» before peak milk supply in spring.
In November 2013, the Irish Dairy Board subsidiary Adams Foods acquired the rights to pack and market all cheese manufactured by First Milk.
Milk processors in Britain have seen their capacity and cash flow tested this year by exceptionally strong milk supply. DairyCo forecasts that milk supply for 14/15 will be the highest in 20 years, at over 14 billion litres. Meanwhile, hundreds of farmers are reported to be on notice that they will shortly be without a processing outlet for their milk.
First Milk generates annual revenues of £530 million (2012/13 figures) and is headquartered in Glasgow with seven manufacturing sites across England, Scotland and Wales.
The co -op stated today: «We are a business owned by dairy farmers. The Board are acutely aware of the difficulties this current extreme volatility is causing First Milk members and the UK dairy industry. We don’t know how long this current market downturn will last, and we are aware that hundreds of UK dairy farmers are unlikely to find a home for their milk this spring. Our priority is to make the business and our processing assets as secure as possible in order that we can continue to process and market every litre of our members’ milk.»
 
Source: Farmers Journal
 

Mirá También

Así lo expresó Domingo Possetto, secretario de la seccional Rafaela, quien además, afirmó que a los productores «habitualmente los ignoran los gobiernos». Además, reconoció la labor de los empresarios de las firmas locales y aseguró que están «esperanzados» con la negociación entre SanCor y Adecoagro.

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