First Milk has become the latest dairy processor to announce an increase in its farmgate milk price, boosting its liquid milk pool price by 2.6p per litre and its balancing pool price by 1.25ppl.

Following the increases, which will be staggered throughout October and November, the processor’s new standard-litre liquid milk price will be 28.65ppl and its balancing pool price will be 27.35ppl.

First Milk liquid milk pool farmers will receive 1ppl more from 1 October and a further 1.6ppl more from 1 November. Meanwhile, balancing pool farmers will see a 0.5ppl increase on 1 October, followed by a 0.75ppl rise on 1 November.

However, there will not be any price increase for farmers supplying First Milk’s cheese pool at this stage. In a letter to farmers, First Milk said this was because a lot of cheap Irish Cheddar had come into the UK market. “The large differential between British and much lower Irish farmgate milk prices has led to a flood of Irish Cheddar coming into Britain over the last six months,” the letter said. “This has affected prices in the foodservice, business-to-business and retail sectors where Irish cheddar is being sold on promotion, sold as generic value lines or sold through some brands.”

Separately, First Milk said it would pay out a 3% return on its members’ capital account balances in October.

“When combined with the payment members received in January and April, in 2012 alone First Milk is paying out a 9% return on investment for active and retired members,” the co-op said.

“This equates to a return of £2,700 across the year for an average one-million-litre producer.”

First Milk’s price rise announcement comes after Müller-Wiseman announced a 2.57ppl price rise for non-aligned farmers from 15 October and Arla raised its price by 2.5ppl from 1 October.

Dairy Crest, meanwhile, has said it is “confident” of delivering higher milk prices for its farmers this autumn.

Topics