First Milk has become the latest processor to reduce the price of milk it pays farmers, blaming declining returns on liquid milk.
The co-operative will reduce its liquid pool price by 1.7p per litre to 24.35ppl and its balancing pool price by 0.9ppl to 25.2ppl. First Milk’s cheese pool price will remain unchanged.
Both cuts take effect from 1 August and come after Robert Wiseman Dairies, Dairy Crest and Arla all announced price reductions in the past week.
Chairman Bill Mustoe said it was “hugely frustrating” to see further price cuts being pushed through in the liquid milk market, which had left First Milk with “no option” but cut its own milk price.
“I am under no illusion as to the effect these price reductions will have on our members’ businesses and their confidence in the dairy industry as a whole,” he said.
“The strategy for First Milk remains unchanged – we believe the route to a long-term sustainable future for farmers is through accessing a broader range of products and markets. The price cuts we have seen over the last few days make us more certain than ever of our chosen path.
“We will continue to move at pace and drive First Milk to another level of breadth and diversification in order to deliver greater returns to our farmers.”
Farmers have reacted with outrage to the latest round of milk price cuts. Dairy Crest Direct farmers yesterday issued a ‘profit warning’, claiming they stand to lose £35m as a result of the cuts. The NFU is holding an emergency meeting today to discuss how to respond to the cuts, while Farmers for Action has indicated it may stage a new round of protests.
Meanwhile, the Scottish Lib Dems have called on the Scottish government to challenge the price cuts.
“This latest devastating dairy price drop at the farmgate is a sharp reminder of the inequality within a food supply chain that rarely favours the primary producer,” said Scottish Liberal Democrat spokesperson for rural affairs Jim Hume MSP.
“It’s evidence yet again that any future Groceries Adjudicator must have the power to protect producers from retailers and processors acting unfairly.”