The price paid to dairy farmers has undergone a succession of increases in recent months - First Milk recently announced its fifth consecutive increase to its members - but this has clearly been not enough to halt the gathering exodus from the dairy sector.

Late yesterday Peter Humphreys, chief executive of First Milk, cited "force majeure", which means his organisation is unable to meet its contractual obligations because of circumstances beyond its control.

He said: "For some time now, we have been experiencing a marked reduction in milk volumes from our members. While we have worked our way through this difficult situation over the past few months to supply our customers, we are now no longer able to manage this position within our current volumes.

"Latest estimates on production from our members for August indicate that production will be more than 5 per cent below our original budgeted forecast.

"As a result, we are unable to honour our original contractual agreements.

"We have informed our customers of this move and are committed to speaking to them in more detail over the next few days to advise on the impact this will have on their raw milk supplies.

"With milk production levels showing no signs of improvement at present, we believe this situation is likely to persist beyond August, but we intend to keep our customers informed of any developments."

Source: Scotsman