First Milk stated the current positivity in the market ’bodes well for future milk price moves’.
In his letter to members, chairman Clive Sharpe said: “Our turnaround process has led to significant changes in First Milk and the results are now coming through in improved financial performance.
«At member meetings in April and May, we committed to close the gap between our milk prices and the average of other dairy businesses by 2ppl, in the form of a business performance supplement.
“The first 0.25ppl of this supplement was delivered in June. Based on a stronger than forecast business performance over the last two months, we will be paying an additional 0.5ppl business performance supplement from July.
«As we covered at member meetings, these improvements are not market related but are from work done at First Milk: simplifying the business; removing loss making divisions; improving our commercial and quality performance; and cutting our costs.
«The result of these decisions is that the combined A&B price for the average First Milk member will increase by 0.65ppl for July.»
Mr Sharpe said while the price increases were a positive signal, the market and milk prices ’still have a long way to go before they get to sustainable levels’.
«In the last few weeks we have started to see a firming of the market, and given the majority of our income is linked to basket price mechanisms, that market positivity bodes well for the future. Our next announcement will be in late July for August milk prices,» added Mr Sharpe.
«At member meetings in April and May, we committed to close the gap between our milk prices and the average of other dairy businesses by 2ppl, in the form of a business performance supplement.
“The first 0.25ppl of this supplement was delivered in June. Based on a stronger than forecast business performance over the last two months, we will be paying an additional 0.5ppl business performance supplement from July.
«As we covered at member meetings, these improvements are not market related but are from work done at First Milk: simplifying the business; removing loss making divisions; improving our commercial and quality performance; and cutting our costs.
«The result of these decisions is that the combined A&B price for the average First Milk member will increase by 0.65ppl for July.»
Mr Sharpe said while the price increases were a positive signal, the market and milk prices ’still have a long way to go before they get to sustainable levels’.
«In the last few weeks we have started to see a firming of the market, and given the majority of our income is linked to basket price mechanisms, that market positivity bodes well for the future. Our next announcement will be in late July for August milk prices,» added Mr Sharpe.
| A and B standard litre milk prices | July-16 | |
| Milk pool | A ppl | B ppl |
| Haverfordwest | 17.39 | 15.1 |
| Lake District | 16.46 | 15.1 |
| Scottish Mainland | 16.38 | 15.1 |
| Midlands | 15.84 | 15.1 |
Source: FGInsight
Link: https://www.fginsight.com/news/first-milk-announces-a-and-b-milk-price-increases-13306