The dairy is to add 0.5p per litre to the price it pays to 700 Muller Direct farmers, taking the price per litre to 30.5p.

Muller agriculture director Rob Hutchison said: “Global markets for dairy commodities like butter and cream are easing following the recent and unprecedented surge, with supply increasing and demand softening.

"However, we remain committed to offering a competitive milk price at each stage in the global dairy market cycle and are investing heavily to add value to the milk we buy.

“We are also working with farmer suppliers to ensure that production is more closely aligned with the requirements of our customers, and to introduce and encourage the use of tools which are designed to help manage milk price volatility.”

Muller Direct farmers are those whose prices are not aligned to supermarkets.

The price they received has risen by about half since the slump which took the farm gate price to close to 20p per litre in the depths of the crisis last year.

The price being paid is a new three-year high, and keeps the price close to the cost of production, helping farmers stay afloat after a long period of contraction which forced some out of the dairy industry.

Farmers have since called for more long-term visibility on prices, and 130 farmers have also taken part in Muller's 100 million-litre Direct Futures Contract.

That deal allows dairy farmers to fix a monthly price for up to quarter of milk production for up to 12 months ahead, offering higher levels of certainty over future milk price returns.

Muller says it plans to increase capacity and capabilities at its three Shropshire sites. In September they announced an investment of £100 million to grow its range of yoghurts and desserts.