Farming News - First Milk slashes prices by 3ppl
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First Milk slashes prices by 3ppl
Following on from cuts announced over the weekend by Dairy Crest, UK-based processor First Milk confirmed that it will also be cutting prices to producers from 1st October.
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From the first of the month, farmgate prices for first milk suppliers will slip to 25.1ppl for liquid pool and 26.1ppl for manufacturing.
The processor's Chair, Sir Jim Paice, commented, "Global and European markets have been falling since early spring, in some cases by almost 50%. Despite us making a number of price reductions since June, market prices for our core products have declined further and faster than our price cuts. We are well aware of the impact that this price cut will have on our members' cash flow, but this latest move means that we now have our milk prices in line with our projected market returns."
Sir Jim said on Monday, "The reasons for falling market returns are well documented. While milk production here in the UK and in key milk producing regions like New Zealand and the US are well up year-on-year, demand from main importing markets has dropped back, and on top of that we now have Russia banning dairy imports from the EU. Given that most of our milk is manufactured into products like skimmed milk powder, cheese, butter and cream, which are traded globally, we are impacted directly or indirectly by all these market factors."
Protest group Farmers for Action has criticised the government's handling of the Russian food ban, and said it has not ruled out more direct protests if members continue to suffer.
In response to cuts announced by First Milk, NFU Scotland said it would seek a meeting with the cooperative, which is based in Glasgow.
All major processors have now cut their farmgate prices, citing unfavourable conditions on dairy markets around the globe. Dairy Crest procurement director Mike Sheldon said, "The 17% reduction in the Global Dairy Trade auction price between July and August means that prices are now around 50% down from their peak at the start of 2014," upon announcing cuts on Saturday.