First Milk unable to fulfil milk contracts for second month

First Milk has told customers it will not be able to meet supply obligations for September following a decline in the volume of milk supplied by its members.

It is the second month in a row the dairy processor has had to invoke a ‘force majeure’ on its milk supplies, a contract clause which frees a party from liability when it is prevented, beyond its control, from fulfilling its contractual obligations.

Peter Humphreys, First Milk chief executive, said the dairy had continued to work to manage the situation while raw milk production continued at lower levels than forecast.

‘Unable to honour commitments’

“Our latest estimates from our members for the month of September 2007 indicate that production will be more than 5% below that of our original forecast,” he said.

“As a result we are unable to honour our contractual commitments this month.

“We are continuing to work with our customers to minimise the impact that this will have on their raw milk supplies, but it is highly likely that we will remain in a situation of ‘force majeure’ beyond September.”