Dairymen to benefit as increase in milk price reflects strong market

THE move yesterday by First Milk to increase the liquid price of milk by 0.8p per litre was cautiously welcomed by NFU Scotland milk chairman, Jimmy Mitchell.

"First Milk, with its move towards market-related pricing, has recognised the improved tone in the market, particularly for liquid milk and a significant number of its members will see the benefit in a better milk price come April."

Mitchell added that he hoped other milk purchasers would follow the First Milk lead and make similar immediate improvements to their milk prices.

The First Milk increase is limited to producers supplying the liquid market and excluding those supplying the cheese and dairy product processors.

Mitchell said it was crystal clear that there was an urgent need for the strength in demand for fresh milk, cheese and dairy product markets to be reflected in a higher farmgate price being paid back to producers.

Rising fuel prices and a hefty feed bill as a result of the prolonged winter made the need for milk price increases all the more urgent. "Those milk purchasers producing for these markets must start to pass back to producers a fair share of the returns that they are clearly making on some of these products," Mitchell added.

In making the announcement, First Milk's chairman Bill Mustoe

said: "Members and their representatives have been consulted on these proposals since last summer. The vast majority of members are supportive of our efforts to directly link market returns back to their milk price.

"This is the first step down that road. We are writing to all members next week with details of their new milk price schedules.

"We continue to make progress in the business on reducing our costs and increasing our income, and this is reflected in the price increases we are announcing today, as well as the one we announced in February. We will make further steps as soon as we can."