FARMER CO-OP First Milk has announced a 1.1ppl increase in the milk price paid to farmers in its manufacturing pool, taking their standard litre price to 30ppl.
As with the co-op’s recent increase to its liquid milk producers, this increase will be phased in over two stages, with a 0.6ppl increase from the July 1 and a further 0.5ppl increase from the August 1.
First Milk chairman Bill Mustoe commented: «We recognise that our members’ expectations are high on milk price and that there continues to be pressure on farm costs due to the poor weather. We will keep their milk price under constant review.
«Our objective as always is to move the returns that we pass back to members as far and as fast as we can. With this in mind, discussions are continuing with all our customers.
«The strategy for the business remains squarely on investing in added value. Whether that be through acquisitions and joint ventures; investing in our processing assets to allow us to respond to consumer demand and produce a broader range of products; or investing behind strong brands like Lake District Dairy Co, as we have done recently with the launch of our Quark range.
«We remain confident that this added value route positions us best to deliver sustainable returns for members as we manage volatile markets now and in the future.»
NFU Scotland’s milk policy manager George Jamieson said: «NFUS welcomes the price rise of 1.1ppl to this pool of producers in July and August, and in particular the acknowledgement that more is needed. First Milk, like NFUS, will maintain its efforts to get more from the cheese market where higher prices are both justified and badly needed at farm level.
«The cheese market has been reluctant to move and we are aware that First Milk has been active in highlighting the need for higher prices for cheese to allow it to lift farmers prices. We have also been active in highlighting the crude tendering process in the cheese markets which fails to acknowledge the long term investment in committing milk for cheese, or the branding and assurance of UK cheddar.
«The cheese market is now, belatedly, reacting to the market realities, and with wholesale prices now rising we should expect cheese contracts to continue to move upwards,» said Mr Jamieson.
«Milk supply projections from DairyCo, even with good weather, still point to lower production than last year. Cheese production has dipped in the UK and Ireland because of low supply and better options for the milk, so we need cheese buyers to react with higher prices if they are to motivate both cheese processors and those producing milk for cheese contracts.
«The position of dairy farmers remains serious and the supply chain including co-ops, processors, retailers and the food sector must absolutely embrace the reality that dairy farming is a long term commitment, with high costs and ongoing investment,» he added.
«For dairy producers to keep the faith in what should be a bright future, we must see a genuine effort to maximise the value of dairy products and pay a fair market price for milk supplies.»
Source: The Scottish Farmer