Market Drayton dairy giant Muller to cut milk price

The Market Drayton based yoghurt and butter maker is to cut its standard price by 0.5p per litre to 26.19p from June 9.

The company said it had kept prices on hold in recent months despite a reduction in the market value of farm gate milk driven by increased production and reduced dairy commodity values.

Agriculture director Rob Hutchison said: “We have reviewed our position with the Muller Milk Group board who are understandably disappointed by a price reduction but understand the market environment we are working in and our commitment to pay a competitive milk price and be clear with our communication to our farmers.

"We will continue to work with the board to review our position."

He added: “Whilst the nature of our business and focus on adding value protects our farmers through a more stable milk price than one driven by the commodity sector, we must ensure that we reflect key changes in the market environment.

“We have been monitoring supply over the lead up to the peak period and our direct supply volume continues to be very strong and significantly ahead of the same period last year.

"We have worked to minimise the scale of this price reduction whilst responding to the balance of supply and demand driving the current market value for milk.”

The move comes in the wake of reductions by other dairies.

Last month, Dairy Crest confirmed that it was to reduce the price it pays to Davidstow farmers by 1p in both June and July, taking its price to 28p per litre – which it will hold until September. First Milk has also cut prices.

The price change has been notified to farmers with 30 days’ notice in line with Voluntary Code guidelines.