FIRST MILK’S efficiency drive has allowed the co-op to once again up its producer milk price, adding 0.25p per litre from September 1.

But while the move has been welcomed by NFU Scotland, the union has repeated its warning that a major change in attitude is still needed from retailers and processors.

Announcing the latest price rise, First Milk chairman Bill Mustoe said: “Since the start of 2010 we have increased our standard litre price for the liquid pool by 2.23p per litre, while the cheese and balancing pools have seen a 2.17p per litre increase.

“We have created a momentum within the business and will continue to focus on reducing overhead costs and improving market returns.”

Commenting on the First Milk move, NFU Scotland’s dairy policy manager, George Jamieson, said: “It is good to see the farmer-owned First Milk continue to make progress on its business rationalisation, and that any savings generated are being delivered quickly back to its members by way of price increases.

“As its business plan moves forward, there will be an onus on the company to secure greater returns from the marketplace for its members as well as restructuring. That may be difficult to achieve given the current intransigence being shown by other parts of the dairy supply chain.

“Despite the strengthening demand for cheese and rising fresh milk consumption, coupled with strong wholesale prices, precious little of the current profitability in milk and dairy products has managed to find its way down the chain and into dairy farmers’ pockets.”

Mr Jamieson added: “A change in attitude from retailers and processors has to happen soon. The harsh reality is that the farmgate prices being paid by all milk purchasers, whether co-op or corporate, continue to fall well short of where the real market is for milk and dairy products.

“Significant movement in prices will be needed in the coming months as all producers head into a winter set to be dominated by rising feed, fertiliser and fuel prices.”

Meanwhile, Arla Foods has posted a profit of £81.2m based on a turnover of £2.77bn for the first half of 2010.

Despite this, the company warns that the next six months will be challenging – although the first half of the year was characterised by higher prices in international commodity markets, it does not anticipate that these high prices will continue for the remainder of the year.

Arla’s chief executive, Frederik Lotz, said: “We have to expect lower earnings from the commodity markets in the second half of the year and at the same time we will see the full effects of the increases in the Arla price.

“A decisive factor will be how consumer confidence develops. European consumers still bear the scars of the economic recession – many are still cautious and prefer discount products to brands and this obviously impacts on earnings.”

n Rubbing their hands all the way to the bank this week will be over 400 staff at Robert Wiseman Dairies, who are to share a £3m windfall this autumn.

The company rewards staff loyalty and performance by offering staff the opportunity to save a set amount every month to buy shares at a price set when the scheme commenced in 2005.

Sustained growth has since boosted the company share price from the 2005 price of 196p to 485p at close of play on Monday of this week. This represents an average gain of almost £7000 for each of the 411 employees in the scheme.