Latest news on prices from First Milk creates more concern

First Milk has today announced further milk price cuts for some of their members. Hardest hit will be the liquid milk or balancing suppliers who will see a 1.2ppl decrease taking their June A volume milk price to 19.3ppl.

The co-operative say they will bring in end product pricing from June meaning that the prices paid to their members across the UK will differ according to geographical location and end use. First Milk members supplying the Haverfordwest creamery in Pembrokeshire will be the only ones to see a positive movement of 0.3ppl with all others seeing a price decrease from June.

As part of the ‘turnaround’ plan, First Milk is cutting 70 jobs mainly at its HQ and in support functions while there will be a new focus on UK contracts and customers and less focus on exports.

NFU dairy board chairman Rob Harrison said: “While I understand that new Chief Executive Mike Gallacher and the First Milk board have had to take drastic and decisive action to secure the longer term sustainability of the business, this news on milk prices brings little or no comfort to some members across England and Wales who have supported them over the years.

“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 all want to see a secure future for First Milk but this should not be done at the expense of their members. I, and my board, have spoken to a number of them who feel they have no other option but to leave the industry. First Milk’s management team need to confirm at the forthcoming member meetings the whole range of actions that they are doing to put the business on a more secure footing. This must not just be about cutting the milk price.

“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.

“We have already been in touch with First Milk and dialogue will continue to understand the rationale behind this latest price movement, and to seek clarity on their long term plan.”

The NFU is urging affected members to attend the meetings organised by First Milk over the next few weeks to seek clarification of the reasons behind these changes. Meetings are in Staffordshire on May 7, Pembrokeshire on May 8 and Cumbria on May 11.

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