Dairy farmers supplying First Milk have been given an unwelcome New Year’s gift with news of another milk price cut.
The Glasgow-headquartered farmers’ co-operative has cut the price it pays farmers in its milk pools supplying cheese.
Those in the Campbeltown, Arran, Lake District and Haverfordwest creamery pools, plus the northern England balancing pool, will experience a 0.25p a litre price cut, while the Scottish balancing pool price will reduce by 0.18p a litre.
The co-op’s interim chairman, Nigel Evans, said: “While 2015 was a hugely challenging year for First Milk and our members, the announcement that we had concluded refinancing with our current banks demonstrates the progress we have made, not only in stabilising the finances of the business, but also in reshaping the company over the last 12 months.
“However, the market backdrop remains extremely tough. Sustained oversupply of milk, especially in the EU is driving up stock levels and putting downward pressure on prices.
“With returns for our cheese business set by a basket mechanism, announcements from other processors of price drops for January have had a direct impact on First Milk returns.”
First Milk was at the centre of last year’s dairy crisis when it was forced to delay payments to farmers after admitting it was suffering cash-flow problems.
Its latest accounts, for the year ended March 31, 2015, reveal a pre-tax loss of £24.935million and turnover of £442.192million.
This compares to pre-tax losses of £4.332million and turnover of £610.509million the year before.