First Milk flag © Tim Scrivener© Tim Scrivener

First Milk has announced its September ‘A’ milk price will increase by between 0.77p/litre and 1.25p/litre depending on regional milk field.

The co-op has announced price rises ranging from 0.52p/litre to 1p/litre for each of its different milk pools and revealed that all members will also be paid an additional 0.25p/litre business supplement payment.

The increase is higher than the 0.5p/litre forecast for September a few weeks ago, and further price increases have also been promised for October.

See also: First Milk announces significant ‘A’ and ‘B’ milk price rises

However, First Milk bosses have acknowledged that the move does not yet return suppliers to profitable price levels.

For example, suppliers in the Midlands and East Wales, who will only benefit from a 0.77p/litre rise, will still be on less than 17p/litre for their milk.

First Milk chairman Clive Sharpe said it was the third month running the business had been able to increase the milk price.

Recovering market

Increased cheese returns, along with price movements from some of the major liquid processors were playing their part in the recovery, he said.

“With the market recovering and having exited our loss making activities, returns are flowing directly through to our milk price,” he said.

“At the same time we are bringing forward the delivery of the business performance supplement, which comes from continuing improvements in our own efficiency.”

Chief executive Mike Gallacher said he recognised that the co-op was yet to return members to sustainable prices.

“However, with future market prices for commodities forecast to be around the mid-20s, members can be confident that as the market continues to rise in line with this forecast, so will our milk price.”

Price increases by pool:

Milk pool Sept price increase (p/litre) Sept business performance supplement (p/litre) Total Sept price increase (p/litre) Sept A price (p/litre) Sept B price (p/litre) Price rise since June for combined A&B (p/litre)
Scottish Mainland 0.75 0.25 1.00 17.73 20.00 2.36
Lake District 1.00 0.25 1.25 18.46 20.00 2.94
Midlands & East Wales 0.52 0.25 0.77 16.96 20.00 2.15
Haverfordwest 1.00 0.25 1.25 19.52* 20.00 3.10

* Includes Tesco cheese group payment estimated at 0.94ppl for Sept