First Milk has announced further price increases for its farmer suppliers as it seeks to increase volumes supplied to world markets.
From 1 April the co-op will increase its standard litre price for suppliers to its liquid pool by 1.2p/litre to 26.2p/litre. Those in its cheese and balancing and Highlands and Islands pools will also get a 1p increase, to 25.52p/litre and 25.98p/litre respectively.
The increases include a 0.5p/litre production bonus, paid on all litres if the volume produced in the month is higher than the same month in the previous year.
A spokesman said this production bonus was being paid to encourage producers to supply more milk for its cheese manufacturing and Westbury businesses. “World markets are pretty strong at the moment and with Westbury, there’s an opportunity to put more milk into these markets.”
He said the co-op wanted a “significant volume” of extra milk and was looking to recruit new suppliers as full members, or through milk supply contracts.
First Milk chairman Bill Mustoe said the latest price increase meant that in 2011 alone, the co-op had lifted the liquid pool price by 2.57p/litre and the cheese and balancing price by 2.25p/litre “as a result of negotiating increases from our customers and continuing to run our own business more effectively”.
“In recognition of the leap in farm input costs and the strength of alternative markets for milk, we are maintaining price pressure on all our customers to enable us to pay a sustainable return to our members,” he said.