Farmer-owned dairy processor First Milk has confirmed that its members will be affected by price cuts next month.

In a statement on Monday, First Milk chair and former farming minister Sir Jim Paice said that the cuts, effective from 1^st September, are being made in response to volatile dairy markets.

Sir Jim said, "As a result of falling commodity prices and a continued decline in UK market returns, from the 1st of September we will need to reduce the price for our manufacturing pool... We have highlighted the falling global and European prices in our member communications over the last few months, and unfortunately at this stage there is no sign of a turnaround.

"We will continue to monitor returns closely and report back to members each month."

Manufacturing pool prices will drop by 0.5 pence per litre and liquid pool prices by 0.65 pence per litre from September. The cuts will see manufacturing pool prices fall to 29.1ppl and liquid pool prices to 28.1ppl.

Price reductions announced on Monday come after heavier cuts inflicted at the beginning of August. The cuts, announced on 30^th June, led prices paid to suppliers of first Milk's liquid pool down by 1.75ppl and by 1.25ppl for manufacturing pool suppliers.