Milk price rise on the cards
A further milk price increase is on the cards in the New Year for Cumbria's First Milk dairy producers.
The major dairy co-op has increased its milk prices to members by 8p/litre since the summer thanks in part to a rapid turnaround plan implemented after First Milk recorded £22m losses in the year to March 2015.
Payments to suppliers were delayed in January last year to help the co-op rebalance its books, and the then chairman, Jim Paice, resigned a few months later.
Now interim results released by the dairy co-op, who own Lake District Creamery at Aspatria, show they are more able to pass on better milk prices to their members.
The co-op is supplied by around 250 Cumbrian dairy farmers, and this month recorded profits before tax of £6.8m in the six months to September 30, compared to £2.4m loss in the same period last year.
Bank debt fell by £20m to £26.1m.
Over the last 20 months, First Milk said it had implemented all 41 recommendations from an independent review into the business, divesting from loss-making enterprises, focusing on its core business of British cheddar, and liquid milk contracts, for customers such as Nestle at Dalston and Girvan, and improving its governance.
CEO Mike Gallacher, who took on the leadership of the business in March 2015, said twelve months on First Milk was now a simpler and more efficient business.
"To align the company better, we now have employees targeted on an index which measures our milk prices versus other leading UK dairy processors," he said.
"Having divested loss making parts of the business and stepped up our operation performance we are now focused on our blue chip long term contracts and joint ventures."
Clive Sharpe, chairman, said: "The continued improvement in performance has given us the platform to increase our milk price faster than the market over the last six months, and we are confident of further significant price increases for all our members over the coming months."
The company now has a smaller, more commercial board and strong farmer council.