Intolerable pressure continues to be heaped on dairy farmers supplying the co-operative First Milk.
From 1 July, First Milk will further reduce the price paid to its farmer members by 1 pence per litre. After capital contributions to the company, it means Scottish farmers supplying First Milk will be receiving between 14 and 16.5p per litre for their milk. First Milk has also announced that Sir Jim Paice will step down as its chairman.
These announcement are the latest in a series of price cuts and personnel changes for the co-op. The Union has met with its recently appointed Chief Executive Mike Gallacher who has put in place a turnaround plan for the company. It also met with Jim Paice and other main board directors at last week’s Highland Show.
NFU Scotland has been involved in working with Scottish Government and has helped secure funding to support improvements to the creamery in Campbeltown and support haulage of milk off the islands on Bute. It will meet with members supplying Campbeltown again on 3 July.
Speaking after today’s bad news for First Milk members, President Allan Bowie said: “First Milk’s previous business model has failed the company and its members. Both the former CEO and now the Chairman have recognised this failure and resigned.
“The turnaround plan put in place by new CEO Gallacher recognises the urgent need for changes. The savings generated by the turnaround plan and this latest price cut, while they may help secure the financial viability of the company, will put those supplying it with milk in a perilous place. It is imperative that the plan delivers quickly an uplift in milk price.
“It is tragic that these further savage price cuts to First Milk members will see another tranche of family farms with a long history in dairying forced to review their future in milking cows. Some may hold on until cattle are housed but for others, this latest cut of a penny a litre will leave many needing to take decisions now.
“I urge Mr Gallacher and his board to up their engagement with their members at this desperate time so that its members can make crucial decisions on the future of their faming businesses.
“We expect the details of the turnaround plan to be signed off by the First Milk Board in the first week of July and we will sit down with Mike Gallacher and his team to see how NFUS can help in its delivery. Milk producers will be looking for the business plan to have the details that will give them confidence for the future.
“We recognise that market conditions are not helping First Milk and continue to make the situation more difficult. If there is to be positive growth within the industry then First Milk farmers need to be given support from stakeholders and Government. These are truly exceptional circumstances which could cause irreversible and long lasting damage to Scotland’s dairy sector at a time when we are looking to generate growth, add value and promote branding of Scottish dairy produce.”
