ARLA FOODS UK has decided to hold its milk price until April 1.
The decision removes industry concerns that the company would react in the New Year to a 0.5p/litre cut for December milk by competitor Robert Wiseman Dairies.
Arthur Reeves of Dairy Crest said the firm would be following suit for milk going into liquid markets but said pressure still remained on cheese contracts.
Arla said it had made the move despite the fact that its two major competitors had each made two cuts during the year totalling 0.6p/litre while it had only reduced prices once by 0.4p/litre.
NFU president Tim Bennett welcomed the decision and said it was a step towards better market conditions.
“The constant tit-for-tat battles have to stop. There is upwards cost pressure on farmers and processors, which means retailers and others must accept that price increases will have to happen.”
However, the NFU is still planning to approach the Office of Fair Trading to question the operation of the milk market.