NFU hopes processors will follow First Milk's move to raise prices

IT MAY only be a quarter of a pence per litre but the announcement yesterday by First Milk that they were raising the price of milk by that amount brought a positive response from NFU Scotland.

Milk committee chairman Jimmy Mitchell reckoned the rise, which will come into force on 1 February, would be welcomed by First Milk suppliers.

He hoped the rise would encourage all other milk processors to react immediately in a similar positive manner.

"The prices being paid to virtually all Scottish milk producers still languish below the true cost of production and that must be addressed in the near future if confidence is to return to our dairy farming sector."

In making the announcement, recently appointed First Milk chairman Bill Mustoe said it had been made possible because a number of projects within the business were now allowing the farmer-owned company to make savings and these were now being passed on to suppliers.

Mitchell praised the "business-like" manner in which its new chairman, Mr Mustoe, has gone about his job of rallying the performance of First Milk as a company with the stated intention of delivering a better return to its producer members.

The statement made by First Milk strongly suggested that further business improvements and price increases may be in the pipeline.

Mitchell said he planned to meet Mustoe to discuss these.