The country’s largest milk co-operative, First Milk, has announced a 2p per litre rise in the price paid to dairy farmers for their milk from the beginning of October – the largest monthly increase for its members since 2007.
The business also forecast that its milk prices would continue to rise in the coming months.
Announcing the move, First Milk chairman Clive Sharpe said that this had been the fourth month in a row of improving prices: “The increase reflects both the improved market returns and the accelerating improvements in our own business.”
He added that milk prices were likely to continue to improve: “Our view of the market outlook is positive as we see prices moving towards 25ppl in coming months. First Milk is well positioned to deliver these improvements directly to our members who can now plan their businesses accordingly.”
The organisation’s chief executive, Mike Gallacher, said that recent improvements in management allowed the co-op to pass market moves directly onto members.
He added that half of the 2p rise had come from higher market prices – and the other half from improved business efficiencies.
NFU Scotland’s milk committee chairman Graeme Kilpatrick, said the price moves, together with the promise of more to come, would be welcomed ahead of winter housing.
However, he added that prices were still a long way short of production costs and said that if long-term confidence in milk production was to be maintained it was imperative that the momentum continued into next year.