First Milk has announced a higher than predicted increase in its September milk price by up to 1.25p per litre.
The farmers co-op has also promised a further increase in October, in line with improved market conditions.
In a letter to members, First Milk chairman Clive Sharpe said the delivery of a business performance supplement, which comes from improvements in efficiency, was also being brought forward.
He said: “As well as increased cheese returns, we are now starting to see price movement from some of the major liquid processors, which directly benefit our balancing pools. There will be further price lifts for October and we will confirm the level of this during September once we get a full view on market changes.”
Chief executive Mike Gallacher conceded that the price increases did not yet return members to sustainable prices but said that as the market continued to rise in line with forecasts, so would the milk price.
First Milk will hold member meetings in September in October to give members a clearer vision for the long term future of the co-op.
NFU Scotland’s milk policy manager, George Jamieson welcomed the price increase but reminded all milk buyers that the significantly improved market conditions should be translated into speedy and significant shift in price.
He added: “Recent AHDB dairy figures report that, year on year, cream prices are up 37%; butter up by 71%; skimmed milk powder up by 34% and cheese prices are now back at £2500 per tonne for mild cheddar and £3500 per tonne for mature.”
Mr Jamieson urged all members to attend the First Milk meetings.