TWO more dairy companies have announced cuts in their January farm gate milk prices.

First Milk will cut 1.1 pence per litre from its manufacturing pool and 1ppl for its standard liquid contracts - down to 22.9ppl and 21.7ppl respectively - from January 1.

Dairy Crest is cutting 1.25ppl from both its Davidstow and liquid contract prices - down to 27.79ppl and 25.79ppl respectively from January 3.

Sir Jim Paice, First Milk chairman, said market conditions had continued to decline since November. He said: "During the last few weeks, the Board and myself have met more than 650 producers and their families at large and small meetings around our milkfields. We have been encouraged and humbled by the determination of members that we all work together to get through this current trough.

"We are working on a number of measures that will help us to manage future volatility and better align milk production and demand. We will make an announcement on this as soon as possible."

Mike Sheldon, Dairy Crest Group Procurement Director, said they held their December prices but could not continue to do so "against the backdrop of such extreme market volatility and increasing levels of milk production."

He said: "We have been continually reviewing all the factors that impact the price and exploring different approaches. Whilst we are all operating in a very challenging market, I am confident that our offer to farmers is competitive. We also remain committed to providing 30 days’ notice of any price change, which is why this move is effective from January 3."

Rob Harrison, NFU dairy board chairman, described the latest cuts as "another kick in the teeth."

"They come at the expense of the average dairy farmer who is now making a significant loss for every litre of milk they produce," he said, "There are many farmers that have invested heavily over past years and are now suffering.

"I do understand the market fundamentals but ask this. Why do farmers never get the market highs when global commodity prices are at their highest but suffer more than they should when commodity prices hit the floor?"

Arla's latest cut of 1.63ppl to 26.84ppl for its standard litre came into effect on Monday (1st).

o The NFU's Northern Dairy Conference is at the Rendezvous Hotel, Skipton on Tuesday (9th) from 10am. George Eustice, food and farming minister; Rob Harrison; and Gwynn Jones, new chairman of DairyCo, are due to speak. Book on 01904 451550 or email north.east@nfu.org.uk