First Milk increases milk price

First Milk has announced that it will increase the price it pays farmers in its cheese and balancing, and Highlands & Islands, milk pools by 0.25p/litre from next month.

It takes the revised standard litre prices to 21.65p/litre and 22.35p/litre respectively.

The increase is a result of new commercial deals and further cost management within the company’s cheese business, chairman Bill Mustoe said.

“Despite operating in a marketplace where prices have been broadly static in 2010, we have been successful in generating additional returns internally through cost savings, improved efficiency and a better mix of products in the market.

“Delivering these returns has allowed us to add £8m to our milk fund in 2010 already through moves in February and April.”

He said the price increases showed the benefit of First Milk’s move towards market-related pricing, which provides more transparent prices based on market returns.

“We will move the milk price up again for each of our milk pools as soon as we have further improvements in net returns,” Mr Mustoe said.

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