On Friday, First Milk announced further price cuts for some of its members.

Liquid milk or balancing suppliers will see their returns fall by 1.2 pence per litre, meaning that June A volume milk price will be down to 19.3ppl.

Although there was a glimmer of hope for increasing milk prices earlier in the year, cuts announced by the cooperative this week will add further worry to a troubling landscape for food producers, in which prices for many key agricultural products have remained languid for months on end.  

Defra figures released this morning show that the gross income from farming in the UK fell by 4 percent last year, driven for the most part by weak prices. Commenting on the figures, NFU president Meurig Raymond said the worrying trend looks set to continue, with dairy prices currently sitting 20 percent lower than they were this time last year.  
 
The co-operative has said it will bring in end product pricing from June, meaning that the prices paid to members will differ according to their geographical location and end use. First Milk members supplying the Haverfordwest creamery in Pembrokeshire will be the only ones to see a positive movement as a result of the change - their prices will rise by 0.3ppl.
 
As part of a ‘turnaround’ plan designed to secure the future of the business, First Milk will cut 70 jobs, mainly at its headquarters. There will also be a shift in focus towards UK contracts and customers and less focus on exports.
 
Commenting on Friday afternoon, NFU dairy board chair Rob Harrison warned that First Milk risks funding its rebuilding at the expense of its farmer members, and said a number of members have approached the union fearing they may be forced to leave the industry.

He said, “The headline A price of 19.3ppl for the balancing supply doesn’t take into account the 2ppl capital investment requirement that came into force in January nor the fact that this is only paid for 80 per cent of the milk supplied. The actual milk price received by these farmers will be far worse and I would implore on First Milk to do all they can to increase both the A and B price for these farmers.”

“We welcome the announcement today of an independent review of the business – the recommendations are to be presented to members before the summer. We look forward to this painting a full and clear picture of what has happened in recent times and help explain the rationale for the turnaround strategy.”
 
First Milk members affected by the turnaround strategy and price cuts can attend meetings organised by the cooperative over the coming weeks. these meetings will be held in Staffordshire on 7th May, Pembrokeshire on 8th May and Cumbria on 11th May.