First Milk Cheese Price Rise an Important Step
01/08/07

NFU Scotland has warmly welcomed the news that Asda will increase the price it pays First Milk for cheese by £400 per tonne, the equivalent of four pence per litre of milk. The Union has stressed that the move is the first recognition from a major supermarket that prices to suppliers must rise.

NFUS President Jim McLaren said:

“This is good news from First Milk and at last we have a major supermarket waking up to the market realities. Yesterday’s announcement by First Milk that it is running short of supplies must shake the retailers out of their complacency. Asda appears to have recognised that farmers must get a higher price if they are to secure the future supply of dairy products.

“I view this as the first of what should be a long line of much more significant moves. We also need to hear Asda and the other supermarkets recognise the need for liquid milk prices, the subject of a recent price war, to rise as well.”

Chairman of the NFUS Milk Committee, Willie Lamont, said:

“A rise which is the equivalent of four pence per litre for milk going into this cheese is only what the market should be delivering. We will continue to support First Milk’s efforts on this and it is important to stress that this is an ongoing process. Asda has committed to keep a close eye on the market and the gauntlet has now been laid down to the other retailers to follow suit.

“The other big supermarkets should not have to be dragged kicking and screaming to deliver prices rises which are at least the equivalent of this and are fully justified by market developments and rising production costs.”

NOTE:

· According to Milk Development Council figures, the wholesale price of mild cheddar has risen by £600 per tonne since April, from £1900/tonne to £2500/tonne. The wholesale price of mature cheddar has remained unchanged since early 2004, at £2400/tonne.

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