Dairy farmers supplying First Milk will see another reduction to their milk price in December.
The farmers’ co-operative has announced plans to cut its standard litre milk price by 1.4 pence to 22.7 pence a litre, and cut its manufacturing pool price by 1.8 pence to 24 pence a litre on 1 December.
The Glasgow-headquartered firm, which is 100% owned by UK dairy farmers, is behind brands such as the Lake District Dair Company, Isle of Arran cheddar, Scottish Pride and Mull of Kintyre cheddar.
Co-operative chairman Sir Jim Paice, who previously served as farm minister at Defra during the peak of the milk price protests in 2012, blamed the price cuts on a drop in returns for liquid milk and cheese in the past month.
“With cheese specifically, this impacts not only on what we are selling now, but on the price that we can sell our cheese stocks in the future,” added Sir Jim.
“Additionally, we have been processing the majority of surplus milk supplied this year into skimmed milk powder. Returns from this market have declined further over the last month as many companies, particularly in mainland Europe, have increased stocks.”
He said the harsh reality was that prices for dairy products were continuing to fall everywhere in the world.
“As a board we have to balance the interests of individual farm businesses with the interest of the business owned by the same farmers,” added Sir Jim.
“We have to set prices which reflect what we can achieve for the eventual product. We will continue to take whatever steps we can to reduce the impact of these negative market conditions, and ensure that the business is in the best possible shape when the market turns.”
Last week, European farmers’ co-operative Arla, which buys milk from one in four UK dairy farmers, announced it would be holding its November milk price amid the launch of a consumer facing campaign.
The firm, which produces Lurpak, Anchor and Cravendale, held its standard litre price at 28.47 pence a litre, but reduced the forecast 2014 13th payment to 0.57 pence a litre.
The 13th payment is paid to all farmers members of the co-operative at the end of March, based on the previous year’s milk price.