First Milk is to increase the price it pays dairy farmers in its milk pools by up to 0.5p/litre on the back of strengthening dairy commodities markets.
The co-op said it had secured improved returns from the non-retail cheese, whey and ingredients sectors.
Farmers in First Milk’s cheese pool will see prices rise by 0.5p/litre, with producers in its liquid milk and balancing pools seeing a 0.3p/litre and 0.35p/litre gain respectively.
The price increases take effect from 1 June.
Chairman Bill Mustoe said: “These moves mean that we have added over £13 million to the milk fund for member payments since February.
“This equates to a cumulative 1.4ppl increase to those in the liquid pool in 2010; a 1.1p/litre increase to those in the balancing pool; and a 1p/litre increase for those in the cheese pool.
“As we did in February, April and May, this move is in line with my commitment that we will increase milk prices as soon as we have cash available. We will move members’ milk price up again when we have further improvements in net returns.”
First Milk has redefined its milk pools to ensure that market returns are directly linked to milk price. This means that the balancing areas have been added to the regional milk pool to create a new balancing pool. The co-op now has three milk pools: Liquid, Cheese and Balancing.
These price moves lift the standard litre prices as follows:
• Liquid pool: 22.78p/litre
• Balancing pool: 22.22p/litre
• Cheese pool: 22.12p/litre