First Milk price increase lags market: ‘The rate of increase may be slower than others’

By Katy Askew contact

- Last updated on GMT

First Milk seeks to reassure farmers that slower pace of price increase is 'timing issue' / Pic: GettyImages BanksPhotos
First Milk seeks to reassure farmers that slower pace of price increase is 'timing issue' / Pic: GettyImages BanksPhotos

Related tags: Farmgate milk price

First Milk revealed that it will increase its farmgate milk price but conceded that the rate of gain lags some competitors in the market.

The British farmer-owned cooperative, which produces cheeses including cheddar and red Leicester primarily for B2B customers, said its milk price will rise by 1.4 pence per litre from 1 July and a further 3.05ppl from the start of August. This will take its milk price on a manufacturing standard litre to 43.45ppl from July 1, and 46.50ppl from August 1, including the member premium.

Milk prices across Europe have been forced up by rising on-farm costs for things like energy and fuel as well as constrained milk volumes and an expected dryer, hotter, summer. According to data released by the European Commission, the average farm gate milk prices in April 2022 was 46.0 c/kg, up +5.7% compared to March 2022 and +29% compared to April 2021. The EC said the estimated price for May 2022 is 47.4 c/kg, an increase of +3%.

First Milk farmer director and vice chairman Robert Craig acknowledged that the cooperative’s increased payments have not kept pace with the overall market. “We recognise that the rate of increase in our milk price may be slower than some others, given the scale of market change,”​ he said.

This month in the UK Arla, for instance, lifted its farmgate milk price for the standard manufacturing litre by 4.49 pence per litre to 47.79 ppl for conventional and 54.34 ppl for organic milk.

But while Craig recognised the price gap, he also sought to reassure First Milk’s farmer-owners that further pricing is on the horizon.

“This is purely a timing issue, and our business model enables us to recover inflationary costs and market movements from our customers over time,”​ he stressed. “We remain completely focused on continuing to pass on these returns through the milk price to our members as soon as they are affordable.”

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