Dairy co-operative First Milk is to increase the price it pays members in its three main milk pools.
From 1 February, farmers supplyng the co-op’s cheese pool will see farmgate prices increase by 1.25 p/litre. Producers in its balancing pool will receive 1p/litre extra, while liquid suppliers move up 0.25p/litre.
First Milk’s chairman Bill Mustoe said: “These moves reflect our achievement of better returns from the cheese and ingredients markets, allied to the results of a continued drive on efficiencies within our own business.
“In contrast, we are particularly disappointed that returns from the liquid market have been static. As soon as ongoing price negotiations with our liquid processor customers are completed, we will pass any additional funds we secure back to members.
“In 2010 we steadily improved our milk price. These increases today, on top of the return on investment we paid out to members last week, are a clear demonstration of our commitment to do the same in 2011.”
The move takes the co-op’s standard litre price to 24.52p/litre fro cheese, 24.27 for the balancing pool and 23.88p/litre for liquid suppliers.
NFU dairy board chairman welcomed the move buut added; ““Even with today’s price increase, the gap between the market price and the farrmgate price remains unsustainably wide. With costs also escalating on farm, First Milk’s members will be hoping that this is just the start of things to come.”
First Milk recently announced a 3% return on investment payment to active and retired members, following improved pre-tax profits of more than £12m in the first half of 2010.