First Milk holds price until Feb

MILK PRODUCERS supplying dairy co-op First Milk can take some much-needed Christmas cheer from news that the price they are paid for milk will remain unchanged until the end of January.

First Milk made the decision on December 21 alongside an appeal for “some sanity” from competitors, who have indulged in rounds of price-cutting throughout the year.

The decision to hold prices was also applied retroactively to deliveries in December. A standard litre is worth 18.17p/litre at the farm gate.

“The facts are, UK production is down, demand is strong and simple economics dictate that there is no justification for price cuts,” said John Duncan, First Milk chief exec.

“The situation must improve, and prices paid to producers must increase, and we fully support recent calls to deliver sustainable returns across the supply chain.”

The news comes amid reports that Farmers for Action is campaigning for a 3p/litre rise in the price that retailers pay for milk.

But there are already doubts that such an increase would have much effect on dairy farmers.

Retailers and processors would take about half of the rise for themselves, said one commentator.

If the remainder were spread among all dairy farmers, not just those producing the 50% of milk that goes into liquid contracts, the resulting rise could be as little as 0.75p/litre.