David Shaw’s independent dairy venture, Sorn Milk, will close its doors in two week’s time.

Last week, The Scottish Farmer reported that Sorn, launched by Mr Shaw 22 years ago, was teetering on the brink, with some of its producers, aggrieved by their price dropping to just 10p per litre, threatening to break away and supply direct to Yew Tree’s Skelmersdale operation.

This week, Mr Shaw confirmed that the Ayrshire operation will come to an end on June 30: “It will be a sad day. The business I have built up will cease to exist. I can no longer compete with people hauling milk for nothing and could not justify paying a realistic price. There is no place for Sorn Milk. It has become surplus to requirements in the Scottish dairy sector.

“I want to thank my 49 producers for the loyalty they have shown me, and at least I have secured a home for their milk having got agreement from both First Milk and Yew Tree to take their milk. It will be up to them to decide where they go.”

On Wednesday night, the Sorn producers heard what First Milk had to offer at a meeting called by the co-op in the Lochside Hotel, New Cumnock.

Mr Shaw, who milks 100 cows himself at his Crofthead farm, Mauchline, has found a home for his milk with First Milk – despite famously saying many years ago that First Milk could be run from “a portable cabin with two phones”.

He said: "I did say that a long time ago, but with the new management at First Milk I believe it has turned the corner and I am happy to put my future in its hands. I believe the price I will be offered will be better than what is on offer elsewhere.

“I am not selling my milk tankers," he added. "They are bought and paid for and you never know what the future might hold."

John McFadzean, of Adamcroft farm, Mauchline, who has been with Sorn Milk for 19 years, said: “It is not good what has happened, but Sorn had become just too small to survive in today’s dairy sector. It looks like the choice we have is to go with either First Milk or Yew Tree. I have seen the Yew Tree operation at first hand and was impressed by their ethos and forward thinking."

First Milk’s sourcing director Paul Flanagan said: “A number of Sorn producers have called into our office over the last few weeks. We are aware that these farmers have been getting around 10ppl, and our intention is to pay these farmers a fair price on a milk supply contract. Any margin we make on this new milk will go towards funds for members.”

NFU Scotland president Allan Bowie commented: “Sorn Milk has been a long established part of the Scottish dairy sector and its decision to stop buying and trading milk is further proof of how deep and damaging the current dairy crisis is.

“Coming on the back of the closure of Muller’s plant in Aberdeen last week, and its impact on North-east producers, this announcement must serve as a further wake-up call to retailers and milk processors on the damage being done at farm level by the current crisis.

“Signs are that supplies are slowly tightening and commodity prices worldwide are stabilising but the change cannot come quickly enough. The wider supply chain must waste no time in reacting and turn prices around if we are to preserve Scotland’s precious producer supply base.”