First Milk makes move on milk price

First Milk will increase its milk price to members' by 0.3ppl, backdated to 1 April 2007, as a result of increased returns from the liquid market. They will also suspend 0.3ppl of members' capital contribution for a period of six months from 1 April 2007.

These two measures taken together will have a positive impact of 0.6ppl on members' milk cheques.

Richard Greenhalgh, chairman of First Milk commented:

"We view this milk price increase very much as an initial step and are fully aware of the current financial situation for dairy farmers. We therefore took the decision to suspend a portion of the members' capital contribution, to assist members' through the next six months.

"In order to move our price up between now and the autumn, we are following a number of routes. On the liquid side, Tesco have set the benchmark and we are in discussions with our processor customers to ensure that this momentum is maintained in the liquid sector, and that our members' receive the benefit. On cheese, we are working directly with our retailer customers to improve our milk into cheese price. Our ingredients business also gives us an opportunity to enhance our returns and we are therefore looking at opportunities to increase our returns from the very strong commodity markets.

"Our aim is to achieve increases across the markets in which we operate quickly as possible, and this remains our no.1 priority."
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