First Milk hikes prices while Dairy Crest reverses price drop

By Jim Cornall

- Last updated on GMT

Dairy Crest has reversed its decision to reduce prices, while First Milk is increasing what it pays farmers for milk.
Dairy Crest has reversed its decision to reduce prices, while First Milk is increasing what it pays farmers for milk.
Two UK companies have responded to some stability in the market by hiking prices.

First Milk said it will increase its July A prices by 0.5ppl as well as lifting B prices from July by 2ppl, while Dairy Crest is reversing its previously announced reduction from July 1.

First Milk wants to ‘close gap’

In his letter to members, First Milk chairman Clive Sharpe said that at member meetings in April and May, First Milk committed to close the gap between its milk prices and the average of other dairy businesses by 2ppl, in the form of a business performance supplement.

“The first 0.25ppl of this supplement was delivered in June. Based on a stronger than forecast business performance over the last two months, we will be paying an additional 0.5ppl business performance supplement from July,”​ he said.

The First Milk Board has also agreed, given the better market position, that the company will increase their B price by 2ppl from July.

Sharpe added that First Milk recognized the market and milk prices still have a long way to go before they get to sustainable levels.

Dairy Crest takes action

Dairy Crest’s decision means the Davidstow core milk price will remain at 21.72ppl until the end of August 2016.

Ruth Askew, head of procurement at Dairy Crest, said the company wanted to reflect signs of stability in dairy markets positively in its milk price at the earliest possible opportunity for the benefit of its farmers.

"This positive news is another sign of our confidence in the future of Dairy Crest and the wider British dairy sector. Dairy Crest is well placed to continue to provide security and opportunities for growth for our supplying farmers.” 

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