The dairy market took a significant step forward this week when First Milk announced plans to increase its B price by 5p a litre.
The Glasgow-headquartered farmers’ co-operative is also set to increase its A price by 1.25p a litre.
The increase to the B price, which is paid for a proportion of the farmers’ milk and based on the spot market value of milk, will increase to 20p a litre on Monday.
The A price, which is paid for the bulk of the farmers’ milk, will increase in two steps increasing by 0.75p a litre in August and 0.5p a litre in September.
The co-op’s chairman Clive Sharpe said the price increases reflected the strength of improving market returns.
Chief executive, Mike Gallacher, said farmers would also benefit from steps being taken to boost efficiency at the co-op including cost-cutting, improving cheese quality and exiting 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,” added Mr Gallacher.
News of First Milk’s price rises follow a stark warning from farm lobby group Farmers For Action (FFA) that more milk price protests could be on the horizon if milk prices don’t improve.
Earlier this week FFA chairman David Handley accused some processors and retailers of holding back from allowing fairer returns to dairy farmers following the jump in dairy commodity market values.
“Unless we see urgent change we will have no option but to take our protests to the doors of those retailers and processors who are most to blame,” added Mr Handley.