FIRST MILK has confirmed that it will increase some of its producer prices during August and September, with a particularly large hike in its ‘B’ price, which jumps by five pence per litre to 20ppl.
In a letter to co-op members, chairman Clive Sharpe said: “Baskets mechanisms for our cheese pools have allowed us to lift prices by 1.25ppl across August and September (0.75ppl for August + 0.5ppl for September) and we believe it is likely that the September increase could rise further.
“Having moved our B price up 2ppl for July, we were keen to raise this further to reflect the strength of improving market returns. We are therefore increasing our B price by a further 5ppl to 20ppl from August 1, and hope that this will allow members the opportunity to benefit from producing more marginal litres.”
First Milk chief executive Mike Gallacher added: “The progress made over the last year at First Milk allows us to continue to move our prices as the market improves. The steep progress on the B price indicates the positive direction of travel we see in the market. Clearly our members need to see further improvement in prices and we will be passing improvements on as rapidly as possible.
“In addition to market moves, we have committed to pass back money from progress made internally in First Milk; from cutting costs; improving our cheese quality and exiting our loss making subsidiaries. As a direct result, we have returned 0.75ppl as a business performance supplement over the last two months and this figure will continue to grow over the year ahead.”
In practice, the ‘A’ price changes mean that the Campbeltown pool will get the full 1.25ppl rise, as will the Lake District producers, while the ‘Scotland Balancing’ pool will receive 0.70ppl, as the main Scotland pool gets a proportion of cheese price moves based on percentage of milk from the pool that goes to cheese.
A First Milk spokesman added that the increase of the ‘B’ price to 20ppl “reflects our view on direction of travel in the market for A prices in future”.
Source: The Scottish Farmer
