1.4ppl increase for First Milk members – from 1st July
Posted on: 08/06/22
First Milk have announced a two-stage milk price increase with a 1.4ppl July 1st increase taking their manufacturing standard litre price to only 43.45ppl in a month when its peers are all paying North of 46ppl up to 47ppl from 1st July. Regrettably this price leaves First Milk members at the bottom of the GB cheese processing milk price league for July and as one commented to Ian this morning “I can’t help but feel like the pour relation yet again. All the pledges and the regen bumf mean nothing”.
The 1st August increase is 3.05ppl taking the manufacturing standard litre price to 46.5ppl which is where it should realistically be in July.
Clearly First Milk recognise that this has suddenly put the Co-op well off the pace hence the announcement of the price to members has come from its CEO Shelagh Hancock whereas previous increases have been declared without Shelaghs additional input. The letter from Shelagh to members appears to be an open and honest summary of how things are even if it’s not an increase to trumpet.
By way of explanation Shelagh points out that First Milk has not been able to recover additional costs from customers and that some of its contracts only allow for cost adjustments on an annual basis. The letter also points to a timing lag which First Milk say will mean the same lag will be there when prices top out resulting in them holding prices presumably at least one month longer than all the others.
The bottom line is until First Milk have the cash to pay out, they won’t. On the assumption the cash does come it shouldn’t be a major problem. That’s one to monitor and is the ultimate test.
For now, the basket pricing First Milk use doesn’t appear to be working in July 2022 as it appears to have done in recent months and given all liquid and manufacturing basket standard litre prices for 1st July look like they will be at 46p plus the gap is a concern.
Ian has asked First Milk whether they have any fixed price contract commitments which are pegging back farmgate milk prices. They have confirmed they don’t unlike one Stilton cheese processor who evidently has fixed price contracts running with one or more of our major retailers which is hitting their farmers milk price.