Fresh cash woe for Shropshire dairy farmers

Producers had been expecting a cheque on Monday, however that is to be put back to January 26 as First Milk attempts to put its own finances in order.

The move is expected to have a serious knock-on effect on cash flows for farmers, and has provoked a furious response from the National Farmers' Union.

First Milk was understood to have been losing 1p on every litre of milk it processed, and it now hopes to raise £10 million by deferring one of its main costs.

However, NFU president Meurig Raymond said the controversial move would be a "serious burden for farmers".

He said: "This is a wholly unacceptable announcement from First Milk, coming after last week's announcement of a milk price cut, which I understand is partly to be reversed."

Mr Raymond added: "Members are now being asked to fork out an extra 1.5ppl in capital investment as well as receiving a delayed payment for milk already supplied.

"This announcement will be a serious burden for farmers and will be damaging to cash flow at an expensive and demanding time of year for costs."

First Milk chairman Jim Paice said the move, which will affect a number of Shropshire producers who supply to the farmer-owned co-operative, was a necessary step to put the company's finances on a more solid footing ahead of the spring.

"The board is acutely aware of the difficulties this current extreme volatility is causing First Milk members and the UK dairy industry," he said.

Mr Price added: "We don't know how long this current market downturn will last, and we are aware that hundreds of UK dairy farmers are unlikely to find a home for their milk this spring.

"Our priority is to make the business and our processing assets as secure as possible in order that we can continue to process and market every litre of our members' milk."

First Milk is also hoping to speak to regional bank bosses in the hope of encouraging them to support farmers affected by the move.