Long-term prospects looking good, First Milk tells dairy farmers
Last updated at 15:19, Friday, 05 October 2012
More than 200 farmers were in ebullient mood at First Milk’s annual meeting when talk of an anticipated spike in milk prices dominated proceedings.
Chairman Bill Mustoe set the tone of Wednesday’s meeting in Llanelli in south Wales in the annual report, saying: “Right now the global demand for dairy has been hit by some short-term over-supply.
“However, the market will recover as supply and demand move back into balance, and returns will be strong in the long-term.”
Group turnover increased one per cent on the previous financial year to £579m while pre-tax profits jumped from £7.2m to £13.3m, thanks to the farming co-operative’s sale of its shares in Wiseman for £9.6m.
Communications director Paul Flanagan said the company was very comfortable with the level of profit.
He added: “We’re a farming co-operative and you can’t compare us to normal Plcs that just want to make as much profit for their shareholders as possible.
“Our profit figure is always going to be relatively low. Our drive is about passing returns back to farmers.”
The annual report revealed First Milk had recruited a net increase of a 195m litres of milk in the year to March and Mr Flanagan said another 70m had been secured since then.
Net bank debt increased slightly to £47 million, which the company said was due to growth in sales of Lake District Cheese, made in Aspatria, and the associated need to increase stocks.
During the year, it invested £6.3m in capital projects, including a significant amount at its Aspatria factory.
Mr Mustoe said: “We have clearly demonstrated from our actions that we can visibly reshape the business without breaking stride.
“First Milk is evolving every day into the business that British farmers want and deserve.”
The company employs 600 staff including chief executive Kate Allum, who last year received salary and bonuses of £333,509.
A milk price rise for farmers supplying its cheese pool was announced on Monday. The standard litre price will rise to 28 pence per litre with two increases on October 1 and November 1.
The move followed what were described as ‘robust conversations’ with its customers.
Ainstable farmer and First Milk member Robert Craig attended the meeting and conference.
“There is quite a lot of pride among First Milk members if you look at where they’ve come from over the last two to three years,” he said.
“I think the general mood is that things will change quite rapidly in the next 12 months.
“We’re going to see a big spike in milk prices on the other side of Christmas.”
He is anticipating a four to six pence per litre milk price rise.
The Dairy Industry Voluntary Code of Best Practice on Contractual Relationships was approved and published this week after legal clearance was secured.
The eight-page document outlines a detailed pricing structure and states that milk producers must be given 30 days notice of any fall in price from processors.
First published at 13:57, Friday, 05 October 2012
Published by http://www.cumberlandnews.co.uk
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