First Milk’s accumulated pre-tax losses of around £22m, during the past financial year, highlights the unprecedented volatility that the dairy sector continues to experience, says NFU Cymru, following the dairy co-op announcement earlier today.
Aled Jones, NFU Cymru Dairy Board Chairman said, “This is another set of results highlighting how unsustainable the UK dairy industry is at the moment. It shows the urgent need for meaningful change to bring long term prosperity.
“Welsh dairy farmers and suppliers to First Milk will be very disappointed and concerned that such huge losses have been recorded. It has been an extremely difficult trading year for the dairy industry, and in particular First Milk, but we hope that today’s announcement will draw a line in the sand.
“There have been a number of senior management changes at First Milk in recent months and a turnaround plan has been put in place for the co-operative. It is essential that this turnaround plan is now delivered. There will be no second chances.
“This plan must deliver results quickly and for the long term. Current milk prices being paid by First Milk are unsustainable, and the two-pence-per-litre capital investment requirement which will be taken from members will only compound the impact. Any farmer supplying First Milk will be haemorrhaging cash on a daily basis and they will be eagerly looking for signs of hope for the future.
“There are signs that dairy markets are bottoming out and all dairy farmers need returns to improve quickly.
“It’s clear that First Milk’s challenges have been amplified by the unprecedented volatility that the dairy sector continues to experience. Needless to say, this volatility impacts on the bottom line of thousands of dairy farming businesses too. If we are to have a sustainable dairy industry in the long run, the whole supply chain needs to look at how it adapts to better manage volatility and face up to our collective challenges.
“NFU Cymru will continue to engage with First Milk as it focusses on ensuring its turnaround plan is successful. However, it is imperative that in the short term the co-operative improves the price it pays for milk to its members to sustainable levels.”
