First Milk has become the last of the major milk buyers to cut its price.
The 0.2p/litre cut for October milk was the dairy co-op’s first in 18 months and was due to pressure in the liquid market and higher fuel prices, said a spokesman.
However, the reduction follows on the heels of the 0.35p/litre fall by processor Robert Wiseman Dairies, which buys much of First Milk’s milk.
John Duncan, First Milk chief executive said: “It is very disappointing to have to make the difficult decision to reduce our milk price, especially at a time when our members, alongside all other dairy farmers in the UK, are clearly finding it extremely difficult to make ends meet on current levels of returns.
“After managing to effectively hold our price for 18-months, largely through hard negotiations with our customers and driving efficiencies within our business, we must face up to the massively increased costs of distributing our members milk as a result of continued oil price increases, coupled with pressures within the liquid market.”
NFU Scotland’s milk committee demanded that retailers and milk processors end their price war or face losing their supply base altogether.
Chairman Willie Lamont, a dairy producer from Dalry, Ayrshire, said: “The First Milk cut is hardly a shock given the tit-for-tat cuts made by their processing customers in recent weeks.
“However, it is further proof that the industry is being destroyed by big companies, wielding too much power and working under a completely blinkered, short-term buying policy.
“Effectively, processors and supermarkets want to pay as little as possible for milk to grab whatever market share they can, completely ignoring the fact that they are driving their supply base out of business as a result.”