ROG WOOD

First Milk, the farmer-owned co-operative headquartered in Glasgow, has announced that the payment due to be made on January 12th for milk supplied in December is to be deferred until January 26th, with all future payments also being deferred by two weeks.

The shock move follows on from last week's announcement of swinging cuts, effective from February 1st, of 2.43p per litre (ppl) for milk destined for its manufacturing pool and 1.6ppl for its liquid pool. The severity of those price cuts are to be partially reversed by 1.1ppl, meaning its liquid pool suppliers will now be paid 21.2ppl, and manufacturing suppliers will receive 21.57ppl.

Against that, the co-op has also announced it is increasing its members' capital contributions from 0.5ppl to 2ppl for milk supplied between December 2014 and August 2015.

At member meetings in November, the First Milk Board was open about the losses that were accrued in the early months of this financial year as the company dealt with rapidly falling markets. Despite aligning milk prices with market returns to balance the books since October 2014, there remains a gap of 1ppl on an annualised basis due to earlier accrued losses, which has restricted the cash available to the business.

Explaining that the moves will deliver a cash injection into the business, First Milk chairman Sir Jim Paice went on: "We understand that the milk payment deferral will cause concern for our members as direct debits and payments will have been lined up against milk cheques. On that basis, we are working with all major banks at national, regional and local level to explain the rationale around this decision. That way bank managers should be well equipped for any conversations they have with First Milk members."

Market round-up

United Auctions sold 618 store heifers at Stirling on Wednesday to a top of 270.8p per kg and an average of 229.1p (+4p on the week), while 974 store, beef-bred bullocks peaked at 298.2p and levelled at 234.9p (+9.9p). One-hundred-and-one store, B&W bullocks sold to 183.7p and averaged 163.4p (+0.3p).

In the rough ring 171 cows averaged 123.3p.

The Cumberland and Dumfriesshire Farmers Mart had 25 prime cattle forward in Dumfries on Wednesday when heifers sold to 233.5p and averaged 213.9p, while bullocks peaked at 226.5p and levelled at 209.9p.

There were 100 OTM cattle presented in the rough ring when beef cows averaged 123.2p and dairy cows levelled at 88.9p.

The firm also sold 923 prime hoggs to a top of £104.50 per head and 214p per kg to average 193p.

The 485 cast sheep forward saw heavy ewes sell to £160 for Texels and average £90.94, while light ewes peaked at £105 for Cheviots and levelled at £73.