First Milk 'very safe' financially despite milk payment deferral
In a YouTube video posted yesterday, Nigel Evans, vice chairman, First Milk, addressed questions from suppliers about its decision to defer this month's milk payment by two weeks.
It announced late last week that its planned January 12 milk payment would be pushed back to January 26.
Pushing back the payment date would help "rebuild the fundamentals of the business ahead of the spring flush" after "a year of volatility that has never been before."
Since announcing the decision, Glasgow-based First Milk has faced backlash from industry stakeholders, including the National Farmers Union (NFU), which said the revised "time scales were unacceptable."
Attempting to quell the concerns of its dairy farmer members, Evans acknowledged that a deferred payment is never a good sign" but insisted that the business is "very safe."
"A number of people have asked if First Milk is secure," said Evans.
"Now, I want to make the point again that this is a cash flow issue."
"It is not an issue about the core capital or the value of the business or anything like that, it is simply about how we deal with working capital on a day-to-day basis."
“I know it comes as a bit of a shock and certainly a deferral of milk payment is not something that we did lightly, but I cannot emphasize enough how big an impact it has on securing the future of the business," he added later in the video.
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