UK dairy farmer cooperative First Milk has announced plans to cut the price it pays to its farmers for raw milk.
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“The economic environment has changed significantly over the past few months. Likewise conditions in the global dairy markets, which drove UK milk prices upwards in 2007 and 2008, have now deteriorated markedly. Milk prices in mainland Europe have declined over the past few months and this is now having an impact on the UK,” First Milk CEO Peter Humphreys said.
First Milk’s board has approved a price cut of 1.25ppl, effective from 1 January 2009.
First Milk supplies liquid milk to a number of UK dairies, including Robert Wiseman Dairies and Dairy Crest. It also manufactures various brands – including Mull of Kintyre, Scottish Pride and the Lake District Cheese Company range – and private-label cheeses at its creameries.
When contacted by just-food, First Milk declined to comment on the level of price depreciation witnessed in its value-added businesses.
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By GlobalDataHowever, just-food understands that UK dairy prices have come under increasing pressure from an influx of cheap imports, particularly from Ireland and continental Europe.
Despite these challenging conditions, Humphreys remained upbeat about First Milk’s prospects going into 2009.
“Over the last six months we have shown flexibility to reshape our business in line with market conditions. We have strengthened relationships with our fresh milk processing customers, and on the cheese side we are focused on growing our brands and retaining and securing premium retailer contracts,” Humphreys said.
