The fortunes of the Scottish dairy industry took a positive turn this week with news First Milk has increased its milk prices.
The Glasgow-headquartered farmers’ co-operative increased both its A price and B price today.
Farmers supplying the co-op will see their A price increase by 0.5p a litre as a result of “an accelerated business performance supplement” and an increase of 2p a litre to their B price due to the positive upturn in dairy commodity markets.
These increases will result in the average First Milk member seeing their overall price increase by 0.65p a litre.
In a letter to suppliers, the company’s chairman Clive Sharpe said: “Our turnaround process has led to significant changes in First Milk and the results are now coming through in improved financial performance.”
He said the A price improvement was a result of improvements made at the company – simplifying the business; removing loss making divisions; improving our commercial and quality performance; and cutting our costs.
The B price increase, however, was a result of an upturn in dairy markets.
Mr Sharpe said: “Whilst I am sure these price increases will be welcome, we also recognise that the market and milk prices still have a long way to go before they get to sustainable levels. In the last few weeks we have started to see a firming of the market, and given the majority of our income is linked to basket price mechanisms, that market positivity bodes well for the future. Our next announcement will be in late July for August milk prices.”
