First Milk delays milk payments by two weeks

First Milk will delay its members’ next milk cheque by two weeks to help it balance its books.

The payment due on 12 January will be pushed back to 26 January, and all subsequent ones will be made a fortnight later than planned.

Plunging dairy prices since last spring and the problems of matching farmgate prices with market returns has meant the co-op has built up a deficit equivalent to about 1p/litre.

See also: First Milk prices slide to 20p/litre in February

First Milk has also taken 1.1p/litre off the heavy February milk price cuts announced last week, meaning its liquid suppliers will be paid 21.2p/litre and manufacturing farmers will receive 21.57p/litre.

But the co-op has also upped its members’ capital contributions from 0.5p/litre to 2p/litre for milk supplied between December 2014 and August 2015.

“These moves will deliver a cash injection into the business and play an integral role in putting our finances and our business on a stronger platform as we approach the spring flush,” said First Milk chairman Sir Jim Paice MP.

He added that even though lenders had been supportive in a difficult year, the board had decided to “rebuild the fundamentals of the business” before the spring flush.

“Our priority is to make the business and our processing assets as secure as possible in order that we can continue to process and market every litre of our members’ milk.”

First Milk has said two-week payment deferral is temporary, but would not confirm how long it would last.

The co-op will be speaking to local, regional and national banks lending to farmers to explain the decision.

Its annual general meeting will be held on 30 January at the Holiday Inn in Haydock, Merseyside. There will also member meetings around the country in February.