UK dairy processors have announced plans to shake up their systems.

Last week, First Milk announced an end to its A and B pricing system; the cooperative will return to a single price structure from 1st September.

First Milk promised that the new system will continue to track market price movements, and that prices will continue to be sensitive to changes in the market, reflecting any movements as soon as possible. The Paisley-based cooperative’s chief executive also noted that, “Right now the market signals are positive and we expect to announce a price rise for August.”

Suppliers also stand to benefit from a 0.5p production bonus paid on every litre of milk that exceeds the amount supplied a year earlier and individual transport/haulage charges will also be dropped from September.

Meanwhile, dairy behemoth Muller has unveiled a raft of changes which the processor promises will help supplying farmers build “vibrant dairy businesses for the future.”

Müller has already promised to invest £100m in its UK network of dairies, stating that this will translate into an extra £700m worth of sales of dairy products made with milk from British farmers by 2020.

On Monday, Müller confirmed a 1.31ppl increase in its farm gate milk price (effective from 1st September), taking its standard litre price to 29.00ppl

On top of this, the processor, which has its UK headquarters in Shropshire, introduced a new ‘Müller Direct Futures Contract’ option, which gives dairy farmers the opportunity to agree a monthly price for up to 25% of their milk volume, for 12 months ahead. Muller believes this will help farmers cope with volatility.

Muller has also launched Müller Farm Insight - a new service for dairy farmers offering data, welfare tools and benchmarking, to help their businesses - and Müller Direct, which is made up of 700 of its 1,800 farmer suppliers who aren’t currently part of groups aligned to major supermarket customers. Müller said its Muller Direct farmers are the focus for all of the above initiatives.

Commenting on Monday, Müller’s Agriculture Director Rob Hutchison said, “There is a lot of uncertainty out there but we are optimistic. Britain remains one of the best places in the world to produce milk and Müller is investing heavily to ensure that consumers will be able to buy more and more dairy products made in Britain with milk from British farmers.

“We want to work with farmers to realise our shared ambitions as the basis of a progressive industry with the security and confidence to invest. The steps we are outlining today are early measures which signal our intent.”