First Milk will increase the price it pays for marginal milk volume¹ for the month of June 2007. In practice, this means that from a total payout of £1.45 million, an average First Milk member will receive an additional £510.
This is the third consecutive monthly move by First Milk to increase the milk price it pays to its members. The opportunity for this latest move is due to additional returns from the whey and powder markets.
Peter Humphreys, chief executive of First Milk, commented:
"In recognising the current cashflow pressure on our members, we decided on this approach as a means of passing returns back as quickly as possible."
"We remain optimistic about our ability to continue to push prices up in all the markets in which we operate. We will keep our milk price under constant review and look to promptly pass increased returns back to our members."
¹ Each month the volume supplied by a First Milk member is split into core and marginal volume.
Monthly core volume is 80% of last year's average daily production multiplied by the number of days in the month or last year's production in that month, whichever is lower.
Monthly marginal volume is the remainder produced in excess of the core milk volume. The marginal price is a percentage of the core price, and varies significantly through the year to reflect when additional milk is required.
Normally milk price increases are applied by lifting the base (or core price), but in this case First Milk has decided to raise the marginal price in order to pass back returns to members as quickly as possible.
First Milk is the largest dairy farmer co-operative in the UK. Its member's farms stretch from Central Scotland to the South of England, and from West Wales to East Anglia.
The business has three divisions: milk operations; cheese; and ingredients.
Milk operations handles approximately two billion litres of milk per annum from around 2800 producers. This milk is supplied to First Milk's cheese business and to many of the leading names in the industry.
The First Milk Cheese Company is the largest UK-based cheese supplier with a 35% share of the cheddar market.
First Milk's ingredients business supplies a range of customers with whey products for functional foods, protein drinks, pro-biotics, pre-biotics, pharmaceutical, bakery and confectionary products.
For further information, please contact Paul Flanagan on 07767 241452