Müller has confirmed that it will hold the milk price it offers to farmers at the current level for the months of May and June, despite a dramatic decline in returns from markets for bulk cream and butter.

The company had communicated to its farmers its hope to increase its Müller Direct base price by 1ppl from May 1st but a rapid decline in returns from commodity dairy products with no current prospect of significant improvement has made it unviable to proceed.

Rob Hutchison, Operations Director at Müller Milk & Ingredients said: “The Coronavirus challenges facing the dairy sector are well known and as we head closer to the Spring flush when farm milk production peaks there is more milk being produced on farms than there are markets for it. This is having a profound effect on the value of dairy products like bulk cream and butter.

“Our core focus on the retail sector and determination to maintain our obligations to feed the nation will continue and whilst we are not immune from dramatic dairy market changes, we aim to provide as much stability as we can during this extraordinary period.”

Gary Mitchell, NFU Scotland Milk Committee Chairman, said: “It was little over three weeks ago that I commented positively on the 1p per litre price increase that Muller had announced but now, like many others, I’m confused and concerned when I read this announcement rescinding the increase from 1 May. 

“Since March, I  have acknowledged the very challenging times we are currently producing milk in, and as part of a vital supply chain, we all need to do our bit.  In this case, it would appear that Muller producers are getting very mixed messages. 

“When requested to cut production a couple of weeks, Muller suppliers were willing to step up to the plate as they fully appreciated the pressures of supply and demand.  That move to curb production was done on the back of an improving milk price - an improving milk price that has now been taken away in just a few short weeks. 

“NFUS is seeking a full explanation from Muller on this, so we can get a better understanding of what the future holds.  All dairy farmers need to be paid a sustainable price, and for this to happen we need more transparency at this challenging time for all.”