First Milk to repay deferred 2015 milk cheques
© Tim Scrivener Dairy co-op First Milk will be repaying its 1,000 farmer-owners for a fortnight’s missed milk payments, which were pushed back in January 2015.
The payment worth two weeks of milk will be combined with the producer’s standard milk cheque due 10 February, effectively making it a six-week payment.
See also: First Milk increase February A milk price
Financial trouble
The decision was made in the second week of January two years ago to plug a £10m black hole in the processors’ finances, following record £22m losses that resulted from inaccurate price forecasting and the collapse in value of cheese stocks.
At the time, the move was seen as the lesser of two evils to ensure First Milk’s very survival and ensure it could continue to buy its producers’ milk, at a time when other processors were not recruiting or buying surplus milk.
Following the decision, First Milk appointed new CEO Mike Gallacher in March 2015, who implemented 41 recommendations from an external analysis of the business, creating a turnaround plan that brought the company back into profit at the end of last year.
Looking to the future
“Returning to our previous payment terms draws a clear line under the turnaround process for First Milk, we now need to concentrate on the future,” said First Milk CEO, Mike Gallacher.
“First Milk is a very different to the business of early 2015. We are a lean, focused and financially secure business capable of delivering a competitive milk price for the long-term.
“We have only been able to deliver the huge changes at First Milk because of the support of members. The business can deliver more for members and we will now get on with that.”
He added, “The role for a scale British dairy co-operative is even more compelling post Brexit and we aim to demonstrate this in the years ahead.”
In December 2016, the co-op announced profits before tax of £6.8m in the six months to 30 September, compared to £2.4m loss in the same period last year. Bank debt fell by £20m to £26.1m.