Milk bottles© Rex Features

Defra’s average farmgate price for February has sparked questions from the industry over its accuracy, showing a rise of nearly 1p/litre on the month, to 27.22p/litre.

This increase has come as a surprise to many, considering the number of processors who have cut prices this spring.

“As the Defra farmgate price is an average covering approximately 90% of UK milk deliveries it is a good indicator,” said a report by DairyCo.

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“However, it does hide a considerable and increasing range of prices.”

About 20% of GB milk supply was organic or produced under a retailer-aligned contract, providing some protection from the price decreases, said the report.

In contrast, farmers at the bottom end of the range had seen some sharp cuts, leading to a widening gap between the best and worst prices.

“In March 2015, the difference between top and bottom was over 13p/litre, an increase of over 10p/litre from just a year ago.”

Meanwhile, international dairy prices fell again at GlobalDairyTrade’s latest auction, with the weighted average dropping by 3.6% to $2,620/t (£1,755/t).

Volumes jumped by 10% to 25,596t.