March 8, 2011

Price increase in April for First Milk suppliers

First Milk has formally declared more hikes in price for its farmer suppliers as it tries to increase volumes supplied to global markets.

From April 1, the co-op will increase its standard litre price for suppliers to its liquid pool by GBP1.2/litre (US$1.94/litre) to GBP26.2/litre (US$42.40/litre). Suppliers in its cheese and balancing and Highlands and Islands pools will also get a GBP1 (US$1.62) increase, to GBP25.52/litre (US$41.29/litre) and GBP25.98/litre (US$42.04/litre) respectively.

The increases also comprise a GBP0.5/litre (US$0.81/litre) production bonus, paid on all litres if the volume produced in the month is an increase over the same month in the previous year.

A spokesperson said this production bonus was being paid to entice producers to supply more milk for its cheese manufacturing and Westbury businesses. "World markets are pretty strong at the moment and with Westbury, there is an opportunity to put more milk into these markets."

He said the co-op wanted a significant volume of extra milk and wanted to recruit new suppliers as full members, or through milk supply contracts.

First Milk Chairman, Bill Mustoe, said "The latest price increase meant that in 2011 alone, the co-op had increased the liquid pool price by GBP2.57/litre (US$4.16) and the cheese and balancing price by GBP2.25/litre (US$3.64/litre) as a result of negotiating increases from our customers and continuing to run our own business more effectively".

"In recognition of the leap in farm input costs and the strength of alternative markets for milk, we are maintaining price pressure on all our customers to enable us to pay a sustainable return to our members," he said.