First Milk has cut farmers’ milk prices further just a week after revealing a sharp turnaround in the business’ performance.
The co-op has dropped prices from today for the creamery and North of England pools by 0.43p/litre and the mainland Scotland pool by 0.3p/litre. Farmers in the Midlands will be paid the same.
Farmers received the news by email yesterday (30 November), with an official announcement this morning.
The cuts will take most farmers’ “A” milk price, paid on 80% of last year’s production, well below 20p/litre.
Last week, First Milk’s half-year results showed the business made a £1.1m profit in the six months to the end of September.
This was a dramatic improvement for a company that recorded a £25m loss in year to March 2015, after delaying payments to farmers and cutting milk prices heavily.
Chief executive Mike Gallacher, who arrived in March to overhaul the co-op with job cuts and a new pricing structure, said more progress was planned.
He said he was “confident this will deliver improved prices and a more sustainable business model for our farmer shareholders”.
In a statement with the latest milk price cuts, interim chairman Nigel Evans said prices for cheeses continued to weaken and hurt First Milk’s projected returns in December.
“The impact of weak returns and excess milk volumes are being felt around the world,” he said.
“I am focusing on the things we can influence, which are ensuring First Milk continues to improve both its financial and operation performance and reshaping our governance structure to deliver a more commercially effective board.”