First Milk announces price rises for July and August

First Milk’s member milk price will increase by 1.4p/litre from 1 July and by a further 3.05p/litre from 1 August.

This will take its milk price for a manufacturing standard litre to 43.45p/litre in July and 46.50p/litre the following month, including the member premium.

Robert Craig, farmer director and vice-chairman, said the company recognised its price increase may be slower than some others, but its business model meant inflationary costs and market movements would be recovered from customers over a longer period of time.

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He said First Milk was completely focused on passing on these returns to farmers as soon as it was affordable.

Earlier this week, several other processors announced price rises for July.

For a standard litre of 4% butterfat and 3.3% protein, these prices range from 46p/litre from Meadow Foods and 45.3p/litre from Wyke Farms, to 41.7p/litre for suppliers on Muller contracts that are part of Sainsbury’s Dairy Development Group.

May dairy market review

GB milk deliveries remained subdued through May, with deliveries in the first three weeks running 2.7% behind previous year volumes.

The peak was reached on 6 May with a daily figure of 37.0m litres – 2.5% lower than the highest individual day in 2021 and the lowest peak day since 2016.

The steady climb in dairy wholesale prices was dampened through May as production hit the spring peak.

With processing capacity stretched, and buyers stepping back from the market in hopes of lower pricing, most dairy products saw prices weaken in May.

Cheddar was the exception to this, as tight availability continued to push up prices.

There has been no respite in the cost of inputs – a situation which is likely to remain while the war in Ukraine continues.

High gas prices continue to feed through into fertiliser prices, although some stability was seen in domestic pricing in April. Availability is said to remain an issue.

Feed prices also remain high in historic terms, with little hope of a change in direction given the outlook on markets for feed ingredients.

While there has been good grass growth this spring, it remains to be seen how much this will help offset the cost of bought-in feed later in the year.

Source: AHDB

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