Dairy farmers in Arla Foods’ direct supply group will see the price of a standard litre increase to over 20p/litre from 1 July.

The 0.3p/litre rise comes on the back of a recent 0.4p/litre hike by the milk buyer, which says it is the first in the UK to break the 20p/litre mark for a standard litre. 

Arla Foods’ Peter Walker said the improved price was a direct result of improvements in dairy commodity prices.

“We have always said that we will react quickly to changes in market returns and that is just what we have done.”

He added that, from this month, about 60% of Arla Foods Milk Partnership members could expect a “significant” additional premium over the base price, as a result of the processor’s relationship with retailers Asda and Tesco.

AFMP chairman Jonathan Ovens said: “We have always impressed on Arla Foods that our members want to see commodity price improvement reflected in the farm-gate return with minimum delay and I am delighted it has done that.”