Milk payments delay hits county farmers

The company takes its milk from more than 1,000 suppliers across the country, including many in Staffordshire, who will be left to face cash flow problems after the previously-scheduled payment date passed yesterday.

The price of milk has fallen in the UK with supermarkets using its as a loss leader. In Asda, Aldi, Lidl and Iceland a four-pint carton is now on sale for 89p. It has fallen by 50 per cent in a year.

While the money from First Milk will arrive with farmers in two weeks' time, farming groups have hit out at the move.

Staffordshire chairman of the National Farmers' Union, Alan Warrington, who farms at Aspley House Farm, Slindon, near Eccleshall, said he hoped to meet Stone MP Bill Cash in the near future to outline his members' concerns.

Mr Warrington, a former supplier to First Milk, said he had been out of dairy farming for three years and warned that the rate of farmers getting rid of dairy herds was accelerating.

"Any delay in payments is bound to cause problems. A lot of farmers, especially tenant farmers and new starters, are finding it tight as it is. This will only make it more difficult," he added.

The Royal Association of British Dairy Farmers is calling for honesty among First Milk officials.

"We urge First Milk board to be honest and up front with its communications with members, many of whom have been left uncertain of the future of their dairy farming businesses," said chairman Ian Macalpine.

"They need to be informed of the absolute truth in particular about the use of their increased capital contributions from the current 0.5pence per litre to 2ppl.

"First Milk's member businesses are being put under enormous stress with crucial decision making with banks and suppliers, both for the short and long term.

"Consequently, they need accurate information in order to make these decisions; they also need to be reassured that they will continue to have a milk buyer."

"We urge all First Milk members to attend their delayed annual meeting on January 30."

The NFU nationally has urged First Milk to meet with suppliers.

After face-to-face talks with the dairy co-operative, NFU president Meurig Raymond said information from First Milk to its milk suppliers was "absolutely essential. "It is paramount that the financial stability of First Milk is secured," said Mr Raymond.

"And as a farmer-owned co-operative, I expect First Milk to arrange early meetings with their farmer suppliers, before their AGM at the end of January, to answer their urgent questions. Farmers need to have a better understanding of their options in order to develop a sustainable business plan.

"Make no mistake, I have heard from NFU members, some who are extremely anxious after yesterday's news, and I have taken those views to the chairman of First Milk during discussions today.

"My priority is the impact of First Milk's announcement on our members and I am working to ensure we are doing all we can across the NFU to support our members at this crucial time."

He said the NFU had lost 60 dairy farmers in December alone.

Mr Warrington urged Staffordshire farmers with concerns to contact the NFU helpline.

"The real problem is the low price of milk. It has dropped so quickly that First Milk has not been able to cope with the drop," he added.

"There has been slow decline in the number of dairy farmers in Staffordshire, but now we are getting such drops in prices it means more are deciding to go.

"I am also hearing of dairy farmers putting investment and plans to expand on hold because of this," he explained.

First Milk, which has its headquarters in Glasgow, said the move would put its finances and our business on a stronger platform.

It closed its creamery at Wrexham last May but had other production facilities across England, Scotland and Wales.

The chairman of First Milk, Conservative MP and former farming minister Sir Jim Paice, said the company was "acutely aware of the difficulties this current extreme volatility is causing".

He said banks had been informed and their staff would be ready to deal with queries from farmers whose direct debits bounce.

The NFU said in December that the number of dairy farmers had dipped below 10,000 for the first time - a 50% fall since 2001.