The Müller Direct standard litre price from January 1 will be 27.5p per litre, down one pence.
The dairy giant, which has operations in Shropshire at Market Drayton, Minsterley and Telford, said the reduction in the milk price reflects continuing declines in the market value of dairy commodities including cream and butter.
Müller Direct farmers who satisfy the conditions for the Müller Direct Premium 2019 will receive 28ppl on their qualifying litres.
For the first time, the 28ppl headline price – which includes the 0.5ppl Müller Direct Premium – is in line with the price offered to farmers through the Müller Direct Fixed Price contract option, which provides a ‘safety net’ to protect against market volatility.
More than a third of the 700 Müller Direct farmers opted to commit up to half of their milk supply to the Müller Direct Fixed Price contract option, one of a number of measures introduced by the company to provide stability in a sector which has experienced damaging levels of unpredictability.
Rob Hutchison, milk supply director, said: “We are continuing to see declines in returns from markets for cream and butter and like most processors exposed to the liquid milk sector, we are not in a position to ignore market realities.
“We are pleased that so many Müller Direct farmers have opted to use the measures we introduced to manage the effects of extreme market volatility. Those who opted in know that for that portion of their milk supply, they are fully protected from further negative market movements.
“We know that contract innovation of this kind is increasingly recognised and valued amongst dairy farmers who operate in markets which are consistently volatile.”