First Milk trades ‘better than break-even’ since April
Dairy co-op First Milk has performed “slightly better than break-even” in the last three months, after reporting £22m losses for the year to March.
A newsletter to farmers on Friday (3 July) said trading in April and May made money, with June figures expected to be similar.
It said First Milk’s profit and loss account was being run at marginal breakeven, to make sure farmers were paid the most possible.
The latest update hints at early success for new chief executive Mike Gallacher’s drastic turnaround plan.
See also: First Milk chairman Sir Jim Paice resigns from co-op
After taking over in March, Mr Gallacher announced up to 70 job cuts, further milk price drops and an overhaul of the farmer payment structure.
Energy savings
First Milk is on track to open a new anaerobic digestion (AD) plant at its Lake District Creamery in early 2016.
The facility at Aspatria, Cumbria, will convert the creamery’s whey permeate into biomethane, which will be used in the factory or flow into the gas grid.
First Milk says the factory will save a quarter of its energy costs, remove 7,000t of carbon from the supply chain each year, and end hundreds of lorry trips to take the whey off-site.
In the last fortnight, the co-op revealed multimillion pound losses for the 2014-15 financial year and the resignation of its chairman, former farm minister Sir Jim Paice.
In press statements, First Milk has said it wants to build a senior management team with “substantial commercial experience”.
The 1,100 members of the co-op remain under severe price pressure, despite the business’ improving performance.
July milk prices will be well under 20p/litre for many producers. June’s “B” price, for any milk over 80% of last year’s production, has been confirmed at 15.15p/litre.
NFU dairy board chairman Rob Harrison said farmers returns were “simply not sustainable”.