On Wednesday, Müller confirmed that its standard litre milk price will increase by an average of 1 pence per litre from 1 October. This will mean the average liquid milk price will be 19.4 ppl (farmers on supermarket contracts will also receive a 2.89 ppl Retailer Supplement).

Former Dairy Crest suppliers who switched when the processor was bought out by Muller at the beginning of the year will be receiving slightly less than existing Muller suppliers (who can expect to receive 20.37 ppl come October). Muller said it intends to align prices paid to former Dairy Crest and Wiseman suppliers, as well as direct Muller suppliers, at the request of its farmer board.

The move comes after the Bavarian dairy processor found itself at the centre of protests and blockades by Farmers for Action last month over the delay in passing improvements in milk markets onto farmer suppliers.

In August, Müller defended its pricing and attacked FFA for disrupting activity, accusing protestors of not representing Muller suppliers and claiming some of those on pickets had sought to become suppliers themselves. When Muller raised its formula milk price for September, however, FFA claimed their actions were vindicated and that the protests had influenced Muller’s move.

On Wednesday, the processor said the October increase reflects a tightening of milk supply and a strengthening of global commodity markets.

Lyndsay Chapman, Müller’s Agriculture Director, commented, “We are hopeful that dairy commodities markets have turned a corner and we will now see a sustained recovery.”

“Cream and butter values have shown improvements that are now starting to be realised in our business, although the latter is taking longer to recover due to the volumes of butter in storage.  Better returns will lead to higher farm gate milk prices, and we are optimistic in this respect.”

“It is important to stress that our standard price is competitive in its own right, but with the addition of the retailer supplement, actual realisations for Müller non-aligned farmers are substantially higher than those received by farmers supplying other processors who receive similar supplements but choose not to offer the same level of transparency.”

“It is right that this additional and very welcome supplement is aimed at Müller farmers who aren’t already part of one of our supermarket aligned groups. We wouldn’t be able to achieve this if the supplement was simply absorbed into our standard litre price and, as a result, spread across all Müller suppliers including some aligned producers.”

“Whether our farmers are in a supermarket group or not, it is our intention to optimise their actual returns each month”.

Roddy Catto, Chair of Müller’s Milk Group farmer Board said "There remains a long way to go before farmers' milk prices recover to a level which is sustainable,” but added that rising prices are a first step towards returning farmers to a more secure position.