Two more major milk processors have announced cuts to farm gate prices for June.

On Friday, Dairy Crest and Muller announced that their farmer suppliers will endure further price cuts from June.

Müller announced a reduction of 0.49 ppl to its standard milk price from 1 June. The average standard liquid milk price for Müller Milk & Ingredients is 19.11 ppl* with an additional supplementary payment to be confirmed (currently 2.05ppl), though suppliers to the former Muller Wiseman milk group are receiving 18.66ppl and ex-Diary Crest suppliers (Müller Direct Milk) are on 18ppl before supplementary payments.

The Bavaria-based processor said the cuts are the product of “The continuing impact of depressed markets resulting from strong supply and high stock levels.”

Dairy Crest - which was acquired by Muller in late 2015 - also announced a reduction of its Davidstow milk price on Friday. Prices will be cut by 1 ppl from 1 June 2016. Dairy Crest said the reduction had been agreed with DCD and applies to all farmers supplying Davidstow. From June,  the Davidstow core milk price will be 21.72ppl.

Commenting on the cuts on Friday, Lyndsay Chapman, Agriculture Director of Müller Milk & Ingredients said, “Markets continue to be severely depressed due to the balance of supply and demand. The ongoing impact of this environment is increasingly challenging for all of us within the dairy sector. We recognise that any further price reduction is difficult news for our farmers but we remain committed to paying a competitive and transparent milk price.

“Our farmers appreciate the retailer supplementary payments paid by a number of our customers, which currently equate to over 2ppl and cushion the impact of the current market conditions to some extent. We have again provided 30 days’ notice of this price change, in recognition of the principles of the Voluntary Code.”

Ruth Askew, Dairy Crest’s Head of Procurement, said, “Dairy Crest is committed to paying a fair milk price. In addition, we aim to provide certainty and stability for our farmers. For example, the recent milk price floor which we put in place during peak production through to the end of May.

“The dairy sector remains under extreme pressure. As a result, we must act responsibly to ensure that our cheese business remains competitive. Unfortunately this means that we must now adjust the milk price. Our Davidstow price is still one of the most competitive manufacturing contracts in the UK, particularly given the significant volumes of milk we purchase.”

She said Dairy Crest is focusing on adding value and growing its brands despite the challenging conditions, and said the processor has organised a relaunch of its Cathedral City cheese brand, which includes TV advertising and other promotional activities.

Last week, Arla announced that its suppliers would receive a 1 euro cent cut from May, equating to a 0.75ppl cut for its UK suppliers.