Dairy farmers supplying First Milk received an unwelcome start to the New Year with news of further price cuts in February
The Glasgow-headquartered firm, which is 100% owned by UK dairy farmers, will cut both its manufacturing and liquid standard litre prices on February 1.
The dairy co-op will cut its manufacturing pool price by 2.43 pence to 20.47 pence a litre, while its liquid price will reduce by 1.6 pence to 20.1 pence a litre.
Farmers supplying the dairy, which produces brands such as the Lake District Dairy Company, Isle of Arran Cheddar, Scottish Pride and Mull of Kintrye cheddar, have already had their prices cut this year.
On January 1, the manufacturing price fell by 1.1 pence, while the liquid price was cut by 1 pence, in line with a price cut announcement at the end of last year.
“During meetings which we held across the country in November, we shared our view with members that this market was likely to get rougher before it gets better. Unfortunately prices for core dairy products have softened further since the start of December,” said First Milk chairman Sir Jim Paice, who previously served as Defra farm minister at the peak of the 2012 milk price crash.
“The rest of the board and I remain acutely aware of the difficulties that the extreme market volatility is causing our members and dairy 1 farmers around the world.
“We do not know how long this current downturn will last, however our priority is to make the business and our manufacturing assets as secure as possible in order that we can continue to process and market every litre of members’ milk.”
Meanwhile, price cuts announced by other milk processors will come into effect next week.
Farmers supply European farmers’ co-operative Arla face a 2.03 pence cut to 24.81 pence a litre on Monday.
The firm, which produces Lurpak, Anchor and Cravendale, said an imbalance between global supply and demand was causing downward pressure on the dairy market.
On January 10, the main milk buyer in the north and north-east – Muller – will cut its milk price by 1.2 pence to 25.9 pence a litre.
It blamed a double whammy of record milk being produced and weak demand for the cut to its price.