Beleaguered dairy industry welcomes milk price rises

The dairy market took a significant step forward this week when First Milk announced plans to increase its B price by 5p a litre.

The farmers’ cooperative is also to increase its A price by 1.25p a litre.

The increase to the B price, which is paid for a proportion of the farmers’ milk and based on the spot market value of milk, will rise to 20p a litre on Monday.

The A price, which is paid for the bulk of the farmers’ milk, will increase in two steps increasing by 0.75p a litre in August and 0.5p a litre in September.

The co-op’s chairman, Clive Sharpe, said the price increases reflected the strength of improving market returns.

Chief executive Mike Gallacher added: “The progress made over the last year at First Milk allows us to continue to move our prices as the market improves.

“The steep progress on the B price indicates the positive direction of travel we see in the market.

“Clearly our members need to see further improvement in prices and we will be passing improvements on as rapidly as possible.”

He said farmers would also benefit from steps being taken to boost efficiency at the co-op including costcutting, improving cheese quality and exiting loss-making subsidiaries.

“As a direct result, we have returned 0.75ppl as a business performance supplement over the last two months and this figure will continue to grow over the year ahead,” added Mr Gallacher.

News of First Milk’s price rises follow a stark warning from farm lobby group Farmers For Action (FFA) that more milk price protests could be on the horizon if milk prices do not improve.

Earlier this week FFA chairman David Handley accused some processors and retailers of holding back from allowing fairer returns to dairy farmers following the jump in dairy commodity markets.