Two UK processors have announced their intention to reduce milk prices for January.
First Milk has announced that from January 1, it will be reducing its manufacturing pool price by 1.1p/L and liquid pool price by 1p/L.
Dairy Crest has also announced a 1.25p/L reduction in milk price. The change will be effective from January 3, 2015
First Milk’s Chairman Sir Jim Paice said that unfortunately market indicators for core dairy products have declined further since the start of November.
“In order to put our milk prices in line with projected market returns, we need to reduce our milk prices further.
“During the last few weeks, the Board and myself have met more than 650 producers and their families at large and small meetings around our milkfields. We have been encouraged and humbled by the determination of members that we all work together to get through this current trough.
“We are working on a number of measures that will help us to manage future volatility and better align milk production and demand. We will make an announcement on this as soon as possible.”
Mike Sheldon, Dairy Crest Group Procurement Director, said he understands that this will be disappointing news for its farmers who were hoping, that the situation might have started to improve.
“I was pleased to agree the price hold for December, providing some respite for our farmers, but cannot continue to maintain the price against the backdrop of such extreme market volatility and increasing levels of milk production.”