First Milk announce Milk Production Incentive Scheme
Published 12 June 2007

First Milk has announced a Milk Production Incentive Scheme that will start in July and run for the remainder of the milk year.  The co-operative has said that strengthening commodity markets over the last few months have exerted upward pressure on liquid and cheese sectors which account for 90% of the co-operative’s sales.  As a result First Milk has designed a scheme to encourage producers to increase milk production compared to last year so that the co-op and its members can benefit from the potential good returns.

The incentive scheme will operate as follows:

• Qualifying litres will be any litres produced over 105% of production in the same month in the 2006/07 milk year. For example if a producer produced 50,000 litres in July 2006, any litres produced this year over a threshold of 52,500 would be eligible for the incentive payment.
• The incentive payment for eligible litres in July, August and December to March will be 21ppl (providing minimum milk quality standards are met).
• For September, October and November the incentive payment for eligible litres will be the normal marginal price paid in this month (135% of the core price in September and 140% in October and November) which is reported to be between 23ppl and 24ppl.

This announcement follows increases in the milk price in April, May and June of 0.30ppl, 0.15ppl and 0.08ppl (on an annual average price) respectively.