August 14, 2007


UK's First Milk announces product increase of GBP 2 per litre



Dairy farmers in the United Kingdom had another round of good news with the announcement that First Milk, the farmer-owned business with 2,800 members in Scotland, England and Wales, will increase its farm price by GBP 2 (US$4.01) a litre effective September 1. 


The increase will take the standard price of a litre to GBP20.6, which will be close to the top of the league of direct buyers. Those producers tied into direct sales with leading supermarkets may well receive closer to GBP29.5 per litre for marginal supplies.


In recent weeks there has been a succession of increases in the value of all dairy products, largely fuelled by a growing shortage on the international markets. Only recently, Asda agreed to upgrade the price it paid to First Milk for all its own label cheeses by more than GBP400 per tonne.


First Milk earlier said it was having difficulty in supplying its contract-based buyers, even warning customers there was every indication that milk supplies would decline progressively towards the end of the year. The situation has the company's buyers expected to pay GBP30 per litre. 


Peter Humphreys, the chief executive of First Milk, said the dairy cooperative's decision to hike prices of its products, was due to strong market conditions globally as well as their members' right to receive profitable milk prices.


Jim McLaren, the president of National Farmers Union - Scotland, who runs a herd of 130 dairy cows on his farm near Crieff, said the move is laudable though the industry would still need to ensure adequate supplies in the future. He said factors such as climate change and high feed costs could immediately disrupt supplies.


US$ 1 = 2.008 British pounds (As of August 14, 2007)