First Milk cuts September farmgate prices further

Co-op First Milk has dropped its milk prices further, with dairy markets still depressed.

Farmers in the four manufacturing pools will be paid 0.3p/litre less from 1 September for their A milk – 80% of the past two years’ average production.

Producers in the three balancing pools will receive 0.2p/litre less.

See also: First Milk now trading “better than break even”

Farmgate returns will now range from 17.9p/litre in the Midlands and East Wales to 19.37p/litre at Haverfordwest and the Lake District.

Overall payments will be lower once First Milk factors in B prices – paid for any extra output based on shorter-term market signals.

Outgoing First Milk chairman Sir Jim Paice – still in-post while his replacement is picked – said the decision was due to “dairy product prices remaining very weak”.

“The First Milk board met yesterday [26 August] and we discussed the progress of our turnaround plan and the current markets within which we operate,” he said.

The strategy to return the struggling co-operative to profit is now running into its fourth month.

New chief executive Mike Gallacher announced half of head office and support jobs would be cut, and the milk payment structure overhauled.

A newsletter to farmers in early July reported that First Milk was performing at “slightly better than break even”, after reporting £22m losses for the year to March.

Mr Paice resigned in late June after less than two years at the top of the board.