A key milk producer has dropped its milk prices again – as Cumbria’s struggling dairy farmers are warned they could face another six months of low prices. 

First Milk confirmed on Monday that it was reducing its January milk price for those pools which supply milk for cheese. This includes its Lake District Creamery in Aspatria.

Interim chairman Nigel Evans revealed the price for the Campbeltown, Arran, Lake District and Haverfordwest creamery pools will drop by 0.25 pence per litre (ppl).

Mr Evans commended the work done to stabilise finances, but said: “The market backdrop remains extremely tough.

“Sustained oversupply of milk, especially in the EU is driving up stock levels and putting downward pressure on prices.

“With returns for our cheese business set by a basket mechanism, announcements from other processors of price drops for January have had a direct impact on First Milk returns.”

Forecasters are predicting there could be no light at the end of the tunnel for producers until at least mid-way through this year.

However, the outgoing National Farmers Union (NFU) dairy board chairman Rob Harrison said that even the best forecasters got it wrong in 2015.

“Today they’re saying that we’re not looking at a market uplift until halfway through this year at the earliest,” he said. “Much could change before then as we’ve seen weather and political events have major impacts on the dairy market.

“Last year was a nightmare for most dairy producers, and we don’t need a repeat anytime soon.”

UK milk production is still far above 2014 figures and the average milk price is hovering at around 22ppl, although Mr Harrison did concede that far too many farmers were receiving a milk price around 15ppl.

“In a year where we’ve seen milk prices drop to seriously unsustainable levels, only those on retailer aligned contracts or producing for niche markets such as organics have been buffered from the market reality of the global dairy downturn, I can only admire the resilience and determination of my fellow farmers,” he said.

On the positive side, Mr Harrison said he had met regularly with the farming minister and achieved positive developments in the push for improved labelling, the extension of profit averaging to five years, the focus on opening new export markets, and support in developing risk management tools.

He continued: “Asda, Morrisons, Aldi and Lidl announced long-term pricing for liquid milk. Tesco extended their COP pricing to cheese, and we saw huge strides on improved British procurement and labelling.

“We’ve also delved into food service and food manufacturing in our goal of encouraging sustainable sourcing across all dairy end users. There’s still much to do here.

“The volatility we’ve faced this year clearly shows that farmers need to have some ability to manage price volatility of their output (milk price) as well as their inputs.”