First Milk pays farmers ‘bonus’ as prices fall further

First Milk will start paying farmers a bonus to reflect the co-op’s turnaround — but cannot stop the short-term milk price pain. 

Suppliers will receive a “business performance supplement” worth 2p/litre, which will be paid to producers in stages. The first dose will come in June, with a 0.25p/litre injection. 

But farmers will still receive less money than the month before, as First Milk has cut its “A” milk prices and effectively cancelled out the bonus. 

After the supplement is included, farmers across the six main milk pools will face a drop of between 0.32-0.44p/litre, depending on where they farm. 

That means they will get 14.94-16.74p/litre for their “A” litres, before any “B” production pulls down their returns further. 

First Milk chief executive Mike Gallacher said the co-op could not control returns linked to market prices, but could improve its performance against competitors. The business supplement would keep building in the coming months, he said.

“Compared to a year ago, First Milk is a very different business.

“We have used the opportunity provided by members to develop a clear plan which we are delivering month by month, working with urgency to pass back improvements in the business directly to members.”

The progress of First Milk’s turnaround plan, which involved job cuts, factory sales and a milk payment overhaul, has been reflected in the co-op’s finances.

First Milk said last month it expected to report an operating profit of £4m for the year to 31 March, against a £20m loss in the 12 months before. The business’ debt fell from £84m to £33m.

It also strengthened its balance sheet, with the controversial move to transform farmers’ invested capital into shares. First Milk no longer has to make cash payouts to farmers leaving the co-op, as they will now keep a stake in the business. 


June milk price (p/litre)

Change on month (p/litre)







Lake District



Mainland Scotland



Midlands and East Wales



Northern England



*Includes 0.7p/litre Tesco supplement paid to all farmers