Producers in the liquid pool will receive a 0.5ppl increase from December 1 which comes on top of a 1ppl increase in October and a 1.6ppl lift in November.
Producers in the company’s cheese pool will receive a 0.5ppl increase from 1 January, which comes in addition to a 1ppl increase in November and a 0.75ppl lift in December.
In the First Milk balancing pool, producers will see a 0.5ppl increase, on top of a 0.5ppl increase in October, a 0.75ppl lift in November and a 0.65ppl increase in December. Due to the phasing of delivering the increased market returns and business efficiencies, the latest balancing pool increase will happen in two stages – 0.25ppl on December 1 and 0.25ppl on January 1.
The increases mean, as of January 1, the liquid pool price will be 29.15ppl and the balancing and cheese pools 28.5ppl.
First Milk’s chairman Bill Mustoe said: “These regular moves demonstrate our determination to support producers through these challenging times by moving milk prices as far and as fast as we can.
“The liquid market has been bouncing around over the last six months. As recently as July, some companies were announcing prices of below 25ppl, but there have clearly been increases since then, supported by a mix of tight volumes and stronger cream returns.
“With cheese stocks now tightening, we fully expect market prices for cheese to strengthen in 2013.”
He said the strategy would be to continue pressing for improved returns, as well as utilising all the markets in which the co-op operated, to generate the best possible returns.
Meanwhile Dairy Crest’s producer organisation DCD has set a February target for achieving a milk price of 32ppl across standard Liquid and Davidstow contracts.
DCD chairman David Herdman said despite the welcome and much needed milk price increases achieved to date, the viability of a significant proportion of the British dairy supply chain still remained under great pressure.
“It is clear many dairy farms have been operating at a loss during 2012 – it is completely unsustainable to expect this to continue into 2013.”
“We appreciate this 32ppl target will be a challenging objective in the current economic climate. However, there is no alternative if we are to avoid critically undermining the foundation of our supply chain – Britain’s dairy farmers,” said Mr Herdman.
