Organic dairy farmers on direct contracts to Dairy Crest will see an extra 0.75p/litre on their milk cheques from 1 April.

The milk buyer said the price increase reflected improved market returns and acknowledged that producers faced increased costs.

Milk purchasing director Arthur Reeves said the firm was developing a “strong pool” of direct organic suppliers to meet growing consumer demand for organic milk.

“We have also made further improvements to our organic contracts to encourage expansion.”

David Denning, organic representative of suppliers’ group Dairy Crest Direct, said: “I firmly believe this is a step in the right direction.”