First raises farm-gate milk price

With butter and cream prices hitting record highs and milk production falling below expected levels for this time of year, raw milk prices are tightening up.

In the latest of a series of price rises from milk buyers, First Milk has this week confirmed that its member prices will rise by between 1p per litre (ppl) and 1.1ppl fromtomorrow.

Last month, the Scottishbased farmer co-operative wrote to members detailing plans to discontinue a previous pricing poli- cy along with individual transport charges. At that time, it also indicated it would introduce a production bonus. These changes aimed at incentivising milk production to meet growing customer demand, will also be implemented from tomorrow.

The First Milk move come at the same time as butter and cream prices continued their meteoric rise, smashing previous records to achieve the highest values since the start of the millennium.

Normally August is a quiet month for wholesale market trade but the average UK butter wholesale price jumped 13 per cent in August to £6,150 per tonne, a whopping 89 per cent higher than the same month last year and 232 per cent higher than when prices began their upward climb in March 2016.

The tightening of price of milk products has also been triggered by a fall in production of 13 per cent between the middle of May and middle of August. Much of this is attributed to poor weather affecting milk cows. While the seasonal fall is in line with the drop recorded last year, it is significantly greater than the decline normally seen at this time of year.