FARMERS supplying First Milk face another drop in milk prices next month.

The dairy firm announced on Monday that it is to cut the price for both its liquid and manufacturing pools by 3ppl from October 1 ‘as a direct consequence of the sharp decline in market prices’, it is said.

Chairman Sir Jim Paice MP said: “Global and European markets have been falling since early spring, in some cases by almost 50%.

“Despite us making a number of price reductions since June, market prices for our core products have declined further and faster than our price cuts.

“We are well aware of the impact that this price cut will have on our members’ cash flow, but this latest move means that we now have our milk prices in line with our projected market returns.”

He said the reasons for the falling market returns were well documented.

“While milk production here in the UK and in key milk producing regions like New Zealand and the US are well up year-on-year, demand from main importing markets has dropped back, and on top of that we now have Russia banning dairy imports from the EU,” he said.

“Given that most of our milk is manufactured into products like skimmed milk powder, cheese, butter and cream, which are traded globally, we are impacted directly or indirectly by all these market factors.

“Against this backdrop, we are taking actions in the business across a number of areas, although admittedly these have a limited impact in the face of such huge market drops.

“For example, we are maximising milk going into higher performing markets, winning increased listings for our added value brands, and taking costs out of every corner of our business.”

First Milk is proud of its status as the UK’s only major dairy company.

The firm is 100% owned by British farmers and supplies a wide range of dairy products and dairy ingredients to customers from both the national and international markets.

Products include block cheeses, soft cheeses, raw milk, butter, skimmed milk powder, whey proteins and sports nutrition brands.

With headquarters in Glasgow, First Milk also has seven manufacturing sites across the UK, including the creamery at Merlins Bridge on the outskirts of Haverfordwest, Pembrokeshire.