FIRST Milk is implementing another milk price increase for its dairy suppliers from Thursday - with another rise in prospect during October.

The co-operative, which has hundreds of Cumbrian farmer members, will pay up to 1.25p per litre more to producers this month.

The increase comprises a 1p market related rise for September and an additional 0.25p Business Supplement Payment for all members due to a stronger than budgeted business performance.

First Milk said a further price increase is being scheduled for October, with the level of this to be confirmed during September.

Chief executive Mike Gallacher said: “While it has been pleasing to announce these milk price increases over the last few months, we recognise that they do not yet return members to sustainable prices.

"However, with future market prices for commodities forecast to be around the mid-20s, members can be confident that as the market continues to rise in line with this forecast; so will our milk price. In addition, we will continue to deliver on our Business Performance Supplement commitment.

“As First Milk’s performance gets back on track after a number of difficult years, we need now to give members a clearer vision for the long term future of our co-op. We now have a very different and much better business and our new vision for the future will be explained at a series of member meetings planned for late September/early October. These sessions will be hugely important as we set the course for the long term.”

In a letter to members, chairman Clive Sharpe said: “I am pleased to report that for the third month running we will be increasing our milk price. With the market recovering and having exited our loss making activities, returns are flowing directly through to our milk price. At the same time we are bringing forward the delivery of the business performance supplement, which comes from continuing improvements in our own efficiency.

“Last month we forecast a 0.5p per litre increase for our manufacturing pools from September 1; however, with further advances in the market we will actually deliver a 1p per litre increase. 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."