Both First Milk and Muller have announced that they are to increase the price they pay for their milk.

First Milk, the farmer-owned co-operative headquartered in Glasgow, is to increase its December "A" price in the Scottish Mainland pool by 2p per litre (ppl) taking it to 23.24ppl, while the "B" price is set at 25ppl.

Chairman Clive Sharpe said: "We have continued confidence that our milk price will increase further during the first quarter of 2017. Since June, the average price increase across our main milk pools is over 8ppl. These increases reflect both the improved market returns and the accelerating improvements in our own business."

Meanwhile Muller has announced that it will start the new year by adding a further 2.5ppl to the milk price it offers farmers, building on its 2ppl uplift which takes effect from today (Thursday).

The actual price paid to Muller's farmers on non-aligned contracts for January is expected to be 26.54ppl. This includes a standard price of 25.44ppl plus the separate retailer supplement estimated to be 1.1ppl in January.

Muller is also concluding a country-wide series of 18 meetings with farmer suppliers to gain feedback on future milk contract and farmer representation proposals. These events follow the acquisition of Dairy Crest's dairy operations and subsequent expansion of Muller's milk supply base.

Lyndsay Chapman, Agriculture Director at Muller Milk & Ingredients said: "Our meetings have provided an excellent opportunity for us to engage with over 1,000 Muller farmers.

"We are bringing together two milk supply groups, each used to different representational models, whilst moving to a single milk contract which aims to better align the supply of milk with our demand in the future.

"It's clear that in the past few years the whole dairy sector has suffered from supply and demand imbalance. Real damage has been caused to farmers and processors as a result of having to dispose of large volumes of excess milk at very low values when production surges, or conversely having to buy from third parties at high values when production falls."

Mr Chapman expects to send Muller farmers new contract documents in January, with the option to sign up from February.

Market round-up

Wallets Marts sold 1982 prime lambs in Castle Douglas on Tuesday to a top of £90 per head and 211p per kg to average £75.70 and 175.4p (+10.6p on the week).

There were also 272 cast sheep forward when ewes sold to £88 for Suffolks and £55 for Blackfaces.