First Milk is to introduce a 13th payment to members from next year, alongside increased transparency in share trading and the freezing of capital contribution targets.
The first 13th payment, or member premium, will be paid in April 2020 at 0.25p/litre for those fully invested in the business, with the payment pro-rata adjusted based on how far the member has got in terms of contributing their members’ capital target.
First Milk has also confirmed that members’ capital targets will be fixed with immediate effect, based on current milk production levels as calculated in March 2018.
This will enable members to grow and expand their milk production without a requirement to contribute additional capital, the co-op says.
Member capital contributions will continue for those who have not yet reached their capital target.
Share trading is to be made easier and the value of First Milk member shares more transparent through using the independent trading platform Asset Match.
This will provide a free-to-use trading system for members that will deliver market-derived trading prices.
Chief executive Shelagh Hancock said financial security had enabled these changes to be made.
“In combination, these changes will recognise the loyalty of our long-standing members, remove some existing barriers to expansion on farm, and provide a simple and transparent way for members and retired members to trade shares,” she said.
The share trading platform with Asset Match will launch on 1 December 2018.
Asset Match auctions use a matching engine to determine a single price for both buyers and sellers.
During the auction period an indicative price will be displayed, which shows the price the shares would trade at if the auction were to close at that point.
First Milk said the pricing mechanism was designed to provide a fair way of establishing market-derived prices where there were differences in the level of user sophistication.