Just over 400 producers on supply contracts will see their standard-litre milk price fall from 22p/litre to 18.65p/litre from 1 August.
In a letter to producers, First Milk blamed the cut on challenging market conditions during the eight weeks since DFoB went into receivership.
“In recognition of the circumstances surrounding Dairy Farmers of Britain’s move into receivership, we decided to pay our standard litre price for June and July milk to those on supply contracts,” it said.
“At the moment, the milk from producers who joined on supply contracts in June is going either to Westbury Dairies or is being sold on the spot market. Prices for spot milk are currently weak and we are unable to continue paying out returns that are significantly more than we are recovering from the marketplace.”
First Milk said the price would be reviewed on a monthly basis and committed to inform producers of any price change prior to the end of the previous month.
“Ongoing, we aim to utilise more of your milk in other markets and secure as much as possible on sales contracts, both of which will improve your milk price,” a spokesman said.
Christine Conder from a small, 60-80 cow upland dairy farm in Lancashire took the farm’s 500,000-litre annual milk production to First Milk from DFoB in June. She welcomed the way the co-op had treated them over that period, but was disappointed by the cut.
“Even with the cut, we’re still a penny a litre better off than we were with DFoB and we’d have been in serious trouble without First Milk. But we need at least 20p/litre to break even and we can’t keep selling milk at below what it costs us to produce.
“It’s the industry and government that’s to blame for letting imports into the country and depressing dairy markets. This industry needs someone with the power to stop imports coming in,” she added.
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