FIRST Milk, which has a creamery in Haverfordwest, has confirmed that it will increase its July A prices by 0.5ppl, as result of an accelerated business performance supplement, as well as lifting B prices from July by 2ppl. It also stated that the current positivity in the market bodes well for future milk price moves.

In his letter to members, chairman Clive Sharpe said: “Our turnaround process has led to significant changes in First Milk and the results are now coming through in improved financial performance. At member meetings in April and May, we committed to close the gap between our milk prices and the average of other dairy businesses by 2ppl, in the form of a business performance supplement.

“The first 0.25ppl of this supplement was delivered in June. Based on a stronger than forecast business performance over the last two months, we will be paying an additional 0.5ppl business performance supplement from July. As we covered at member meetings, these improvements are not market related but are from work done at First Milk: simplifying the business; removing loss making divisions; improving our commercial and quality performance; and cutting our costs.

The First Milk Board has also agreed, given the better market position, that the company will increase their B price by 2ppl from July.

The result of these decisions is that the combined A&B price for the average First Milk member will increase by 0.65ppl for July.

Clive Sharpe added: “Whilst I am sure these price increases will be welcome, we also recognise that the market and milk prices still have a long way to go before they get to sustainable levels. In the last few weeks we have started to see a firming of the market, and given the majority of our income is linked to basket price mechanisms, that market positivity bodes well for the future. Our next announcement will be in late July for August milk prices.”