DAIRY co-operative First Milk has announced another price cut to its supplier members.

From July 1 the standard litre price will be reduced by 1ppl with the exception of suppliers to the Midlands balancing pool who will see a 0.7ppl reduction.

The cut is the latest gloomy news in a turbulent year for dairy farmers and First Milk, the UK’s major dairy company, which has a processing plant at Haverfordwest.

First Milk recently announced losses of £22million in 2014-15 and chief executive Mike Gallacher has implemented a comprehensive turnaround plan over the last few months.

NFU Cymru president, Stephen James, said: “We are in a position now whereby the majority of dairy farmers in the UK will be receiving milk prices far below the cost of production. This is simply not sustainable.

“What we need is a guarantee from our milk buyers that they are doing all they can to get the best possible price from the market. But above all, we need the industry to work with us to develop a rigid and practical set of risk management tools that can benefit our farmers and support them with fair prices during a period of market volatility.”

It is also announced that Sir Jim Paice will step down as chairman of First Milk.

Stephen James added, “Jim has chaired First Milk through a very turbulent time for First Milk, its members and the entire dairy industry.

“We are pleased that First Milk is looking to the future in a number of ways including its external review of Governance and the need to bring extra commercial acumen onto its board and its management team. We recognise that it has many challenges ahead and we will work closely with First Milk towards achieving a long-term sustainable dairy market.”

Chairman Sir Jim Paice commented: “With the turnaround programme now gathering pace and the timescales for an external review agreed, I believe the time is right to announce my intention to step down as chairman of First Milk.

“In my letter last week I said that I believe the Board needs more people with real commercial and business skills. That means I think there has to be significant change in the constitution of the Board, and that includes the chairman role.”