First Milk will be cutting the price for both its liquid and manufacturing pools by 3ppl from 1 October as a direct consequence of the sharp decline in market prices.
Chairman Sir Jim Paice MP commented:
"Global and European markets have been falling since early spring, in some cases by almost 50%. Despite us making a number of price reductions since June, market prices for our core products have declined further and faster than our price cuts. We are well aware of the impact that this price cut will have on our members' cash flow, but this latest move means that we now have our milk prices in line with our projected market returns.
"The reasons for falling market returns are well documented. While milk production here in the UK and in key milk producing regions like New Zealand and the US are well up year-on-year, demand from main importing markets has dropped back, and on top of that we now have Russia banning dairy imports from the EU. Given that most of our milk is manufactured into products like skimmed milk powder, cheese, butter and cream, which are traded globally, we are impacted directly or indirectly by all these market factors.
"Against this backdrop, we are taking actions in the business across a number of areas, although admittedly these have a limited impact in the face of such huge market drops. For example, we are maximising milk going into higher performing markets, winning increased listings for our added value brands, and taking costs out of every corner of our business."
Notes to editors
About First Milk
First Milk is the UK's only major dairy company, 100% owned by British farmers. It supplies a wide range of dairy products and dairy ingredients to customers in both national and international markets including block cheeses, soft cheeses, raw milk, butter, skimmed milk powder, whey proteins and sports nutrition brands.
It is headquartered in Glasgow with seven manufacturing sites across England, Scotland and Wales.
First Milk's aspiration is to provide consumers with great-tasting nutritious food, while delivering value for every part of its farmers' milk. As a business with a passion for innovation and sustainability, it is constantly seeking fresh ways of working with partners across the supply chain to drive pioneering solutions.
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