Arla and First Milk announce November price hikes – NFU says it’s not enough

01-Nov-2016 - Last updated on 01-Nov-2016 at 14:36 GMT

The NFU says that the price farmers are paid for milk isn't rising quickly enough.

National Farmers’ Union (NFU) dairy board chairman Michael Oakes has questioned why UK milk buyers are still not passing on increases in market prices to suppliers.

Arla announced a 1.49ppl (1.81 cents) increase in the price it pays its UK members for conventional milk, taking the November price to 23.14ppl (28.14 cents per liter).

And First Milk has confirmed ‘A price’ increases for November ahead of its initial 1ppl (1.22 cents) forecast. The Midlands pool increases by 1.41ppl (1.71 cents per liter); Haverfordwest and Lake District pools increase by 1.33ppl (1.62 cents per liter) and Scotland pool increases by 1.22ppl (1.48 cents per liter).

The company had previously announced a 5ppl (6.08 cents per liter) increase in its B milk price increase for November.

First Milk chairman Clive Sharpe said the current forecast is that all pools will also see a minimum of a 1ppl increase for December.

Report on missing £200m

However, with market indicators AMPE and MCVE at and around 30ppl (36.49 cents per liter), Oakes said he wants to know what is holding back bigger increases in the UK milk price for farmers.

“With market indicators racing upwards in the UK and EU and our domestic milk production down I cannot understand what’s holding back farmgate milk prices to this degree,” Oakes said.

He added that last month the NFU published a report that said £200m ($243m) was missing in the UK dairy supply chain between April and September.

Prices up since publication

Oakes argues that since the report was published, commodity markets have strengthened further - butter prices are now at UK record levels, 108% higher than in April; cream prices are 144% higher at more than £1,900/tonne ($2,311) for October.

“Farmers are now looking at AHDB’s AMPE and MCVE indicators which show prices at 28.5ppl (34.66 cents per liter) and 32.4ppl (39.45 cents per liter) respectively,” Oakes said.

“The Defra UK average is now 21.34ppl (25.95 cents per liter). Clearly we need all UK milk buyers and customers to act responsibly and start reflecting the true value of farmgate milk in what they pay their suppliers.”

First Milk sells CNP

First Milk has also announced that it has agreed to sell its CNP Professional business based in Manchester to The Protein Partners Ltd.

Mike Gallacher, chief executive of First Milk said the sale of CNP follows a full strategic review by the board last year, and is the final step in allowing First Milk to focus on its core businesses in hard cheese and liquid brokering.

"Today's announcement is also a good deal for our CNP employees, our customers and consumers,” Gallacher said.

“The brand CNP and the Hyde site will form a key part of the future strategy of The Protein Partners and as such the sale protects employment at the site."