Muller, the UK’s second-largest milk processor, has dropped its standard milk price by 1.5p/litre from 1 April, meaning the price it pays to 700 farmers on it's direct contracts will drop to 26.5ppl.This follows on from Muller cutting 1ppl from the price it pays farmers for milk in March.

Muller said falling values for wholesale butter and cream in the past six months, as well as an increase in milk production was the reason for the falling price.

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“Market forces have been moving against farmgate milk prices throughout the UK and we therefore have to adjust our position,” said Rob Hutchison, Muller Milk supply director.

“However, Muller has invested heavily in the UK to create a balanced portfolio of added-value branded and private-label dairy products, and this is helping us to mitigate the full extent of the decline in dairy commodity values.

“We also remain focused on continuing our work with Müller Direct farmers through a range of initiatives designed to support business improvement, managing during periods of volatility and support for the next generation.

“We are confident that our agriculture strategy, UK investment and category development plans will continue to underpin a highly competitive milk price, regardless of market conditions, over the longer term.”