First Milk reports £7.1m losses

The NFU has said strong leadership is key to the future success of processor First Milk, which published its latest results today.

Figures from the dairy co-op showed a decline in turnover of three per cent to £583 million, blamed on falling milk powder, cheese and whey returns in the second half of the year. The business also reported losses of £7.1 million during 2008-09.

At the same time, the board upped the average milk price paid to its 2400 members to 25.35p/litre (up 3.67p) to shelter farmer members from the effects of weaker and more volatile commodity markets.

Chief executive Peter Humphreys said: "As we have seen from the results of others who operate in the UK dairy sector, 2008/09 was a year of challenges and volatility.

"Recognising that rising on-farm costs were putting serious financial pressure on our producers, as a board we took the decision in late 2008 to utilise the reserves we had built up in order to shelter members as much as possible from the market downturn.

"Our balance sheet remains strong and our forward plans will ensure that reserves are replaced over the period of our business plan.

NFU dairy board chairman Gwyn Jones said: "Strong strategic and financial leadership is needed in order to maintain confidence in the business, improve the position and implement a positive growth strategy.

"We can’t ignore these results but I think they have to be taken in a global context which has seen the world facing a very tough economic climate. The dairy sector itself has experienced incredible market volatility which is here to stay and which dairy farmers and milk buyers must start to manage.

"However, I believe First Milk has a solid foundation for success. As a member-owned co-operative it needs to focus on ensuring its members are getting the best returns possible. Communication and clarity from the top are key to making this happen; included within that are those ex-Dairy Farmers of Britain members supplying First Milk."