Dairy Crest has acted swiftly following criticism last week from its supply group Dairy Crest Direct.

The milk processor said it would be paying an extra 0.4p/litre to all its suppliers from July.

Milk purchasing director Arthur Reeves said the rise for those on liquid contracts reflected the strength of commodity markets, particularly skimmed milk powder.

However, Mr Reeves said there had still been no movement in the middle-ground liquid or cheese markets.

He said firm had still decided to increase the value of its milk-for-cheese contract in recognition of farmers’ higher costs of production and an anticipated hike in cheese prices.

Ian Sharman, chairman of DCD, said: “We welcome these increases and recognise that Dairy Crest has shared some of the benefits of anticipated higher cheese prices with us.”