NFU Cymru says First Milk members are shocked at the forecast milk price set for April under their new A and B pricing model and the Union is concerned that some are already questioning their future in the industry as a result.
The co-operative announced that the April A price will be set at 20.87ppl for the manufacturing pool and 20.5ppl for the balancing pool.
The range for the B price is 16ppl to 18ppl which will be fixed after the month-end. This B price will be paid on at least 20 per cent of a member’s total volume.
NFU Cymru Milk Board Chairman Aled Jones said, “Late last month, First Milk announced they were bringing in their new A and B pricing model from April and yesterday we’ve seen what this delivers. Their members will be feeling continued frustration with First Milk with this announcement of shockingly low prices for both the ‘A’ and ‘B’ volumes. Put simply, this is a price cut masquerading as a new pricing model. We have seen positive signals recently and this needs to feedback onto farm urgently.
“The B price forecast of 16-18ppl is extremely cautious – sitting at around the EU powder intervention price this is not manageable for farmers to deal with. If I was a First Milk member I’d be asking them how exactly the ‘B’ price will be substantiated at the end of the month. This model desperately needs more transparency in the calculations, as a cooperative, First Milk members need to understand why they are facing yet another price cut.
NFU Cymru President Stephen James said, “In effect the B price will see some farmers receiving nearer 12-14ppl once seasonality, volume and capital contributions are taken into account.
“This decision will see many First Milk producers seriously questioning their future in the dairy industry. This has massive implications not just for the future of dairy production in one of the most efficient milk fields in Europe but also for the rural economy.”
Aled Jones, concluded, “With other milk buyers also looking to implement these pricing models from April we would urge them to be honest and transparent with their suppliers as to how the A and B milk price is calculated. This week’s positive GDT auction result comes at the back of five consecutive positive outcomes, and we’ve seen two upward price changes from Dutch co-operative Friesland Campina. The signals are there that the market is starting to stabilise and we want to see this confirmed in our farmgate milk prices.”
