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First Milk is increasing prices for its liquid milk and cheese pool suppliers, by 0.5p/litre and 0.4p/litre, respectively.

From 1 April, liquid milk producers will receive 29.65p/litre for a standard litre, while cheese and balancing contracts will rise by 0.4p/litre, to 28.9p/litre.

Members will also receive a 3% return on their capital account balances in April, but the co-operative is increasing capital levies from 0.2p/litre to 0.5p/litre at the same time to support future business growth and investment.

“We have invested £20m over the past 18 months on acquisitions and joint ventures,” said chairman Bill Mustoe.

These included the acquisition of sports nutrition company CNP Professional and a soft cheese business in Fife, as well as a joint venture with Fonterra for whey protein concentrate and a renewable energy project.

“In order to speed up our move into added value and really move the dial on the returns we can pass back to members, we need to go faster and further with our investments,” said Mr Mustoe.

“Having now prioritised a number of options, with the support from members alongside our external funders, we have the opportunity to take advantage of added value investments.”

First Milk employees and some farmers who supplied other companies had also shown interest in investing in the business, he added. The board were therefore looking at ways to raise capital from non-members without compromising ownership of the co-operative. “Members will be consulted on this route as part of regular Farmer Forum meetings before exploring this route further.”

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