Milk producers must see benefits from price upturn
THE RISE in First Milk’s July prices comes as welcome news to producers after months of stagnation and reductions.
The group increased its July A prices by 0.5ppl, as a result of what they say is an accelerated business performance supplement, as well as lifting B prices from July by 2ppl.
The result of these decisions is that the combined A and B price for the average First Milk member will increase by 0.65ppl for July.
The 100 percent farmer-owned company also stated that the current positivity in the market bodes well for future milk price moves. In a 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.’
While welcoming the increase in price, Highlands and Islands MSP Rhoda Grant believes the benefits must be passed on to producers who continue to ship milk at a loss.
She said: ‘While Scotland’s dairy industry has a long way to go before it gets to the end of this latest crisis, there does appear to be a welcome upturn in the market.
‘Dairy herds numbers are now remaining static and, hopefully, we are coming to the end of the depressing sight of farmers selling off their herds.
‘Many of these farms have been passed on down the generations of the same family and it is always sad when this process is forced to a halt.
‘After two years of decline, we are, at last, seeing an increase in shop milk prices. It is vital for the dairy industry that a fair share of this increase is passed on to producers.
‘It is not just fair, but essential, that prices paid to farmers increase as the market strengthens.’
Mr Sharpe added: ‘Whilst I am sure these price increases will be welcome, we also recognise that 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.’