Muller has confirmed its milk price will be unchanged for March. Following five consecutive months of increases, the standard litre price will remain at 26.69ppl.

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In a letter to suppliers, the interim agriculture director Rob Hutchinson, who has replaced Lindsay Chapman, cited increasing supply volumes and commodity markets ’easing back’.

He said production was above last year in all its milk field areas and it was important to closely monitor the balance of supply and demand as the ‘spring peak’ approached.

“Our milk price position for March has been discussed with the farmer Board and reflects the current environment where dairy commodity markets are easing back.  In addition we are seeing increasing direct supply volumes across all our milk field areas. As we approach the period leading into the spring ‘peak’ it is important that we closely monitor the balance of supply and demand.”

NFU dairy board chairman Michael Oakes commented: “Muller is the first major milk buyer to announce a price hold for March. Although we would clearly like to see steady growth, indicators show that the dairy market is still fragile. AMPE and MCVE indicators have been relatively stable since October, with an AMPE drop for January. However, milk prices are still far from sustainable and we need a significant period of recovery and stability before farmers will be able to recoup any losses. It is important that the supply chain recognises this. Although milk production appears to be slowly increasing, latest figures show that production is still lower than it was last year. Supply and demand is key and farmers need to be able to react to real time market signals, which is why we are calling for mandatory price reporting.”

“We are surprised that Muller has not announced a forecast retail premium for March, which they have historically always done and which gives farmers more certainty of price. Muller has also stated that its new contract will be out with suppliers in late February. We plan to meet with Muller in the next few weeks to discuss the changes in the contract.”