UK dairy co-operative First Milk today (25 September) reported an annual loss of over GBP7m (US$11.2m) as it upped the returns paid to members to “shelter” farmers from the downturn.
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The company booked an after-tax loss of GBP7.1m, which included a one-off charge of GBP3.6m linked to restructuring at two sites.
Turnover fell 3% to GBP582m in the year to 31 March, as powder, cheese and whey returns dipped in the second half of First Milk’s fiscal year.
First Milk chief executive Peter Humphreys said: “Recognising that rising on-farm costs were putting serious financial pressure on our producers, as a board we took the decision in late 2008 to utilise the reserves we had built up in order to shelter members as much as possible from the market downturn.”
Humphreys insisted that the business was “extremely competitive” and pointed to moves the company has made since the start of its current fiscal year, including the building of a creamery in Scotland and a finance deal with Lloyds Banking Group.
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By GlobalDataHe added: “We will continue to develop our branded offering. Our target for 2009/10 is to sell 20% of the cheese we produce as brands compared to 5% in 2008/09.”
