A slight price increase for First Milk broke the ranks in an otherwise cautious dairy market as processors braced for the impact of spring production.
The farmer-owned co-operative has confirmed that its production standard liter will rise by 0.5p to 30.75p per liter from April 2026, including member insurance premiums.
The increase came as broader market signals remained subdued, with global supply increasing and commodity markets remaining under pressure.
In contrast, Arla opted for stability in March, keeping conventional milk prices unchanged at 33.98 ppl and organic headline prices at 57.98 ppl, as global supply and soft commodity markets continue to pressure profits.
The rise in First Milk has slightly narrowed the gap with Arla’s previous price, but it remains below its major rivals.
Commenting on the move, First Milk director and vice chairman Mike Smith said the price increase would provide some support to members facing sustained cost pressures.
“The current milk price environment continues to put significant pressure on farming operations and we are pleased to be able to achieve this price increase at this time,” he said.
However, he cautioned that volatility remains a risk as peak production approaches.
“The market remains uncertain and the outlook for the coming months is likely to be influenced by spring flush milk volumes.”
The cooperative said it remains focused on improving efficiency and controlling costs to strengthen Farmgate’s margins.
“We remain committed to maximizing efficiency across our operations, reducing costs wherever possible and ensuring the highest possible return on every liter of milk,” Mr Smith said.
Due to the price increase, First Milk will introduce an emissions bonus from April 1, replacing the existing production bonus. From now on, payments will be linked to each member’s annual carbon footprint results.
This shift marks a clear shift from volume-based incentives to carbon-related performance and reflects increasing pressure from customers and governments for measurable environmental progress.
“Reducing emissions is becoming increasingly important to our customers, their customers and governments,” Mr Smith said, referring to the co-op’s 2040 net zero target.
“It is important that our incentives recognize and reward the efforts of our members and that our emissions strategy is aligned with the carbon reduction and removal results being achieved on farms.”
With European milk supplies remaining strong and commodity markets weak, the coming months will test whether this increase signals further price consolidation or just a temporary boost before spring production reshapes the market.
