Dairy farmers supplying milk to Dairy Crest for Davidstow cheese are set to get a 1p/litre milk price increase on 15 July.
The 400 suppliers will see their standard litre milk price hit 32.25p/litre, on the back of improved UK and Irish wholesale cheddar markets.
In addition, the company has revised its Davidstow Volume Incentive; producers will no longer need to exceed a threshold of 3.5% and will now be rewarded for producing at least 2% more milk than the 2012-13 year.
The new scheme, backdated to 1 April, will run until 31 March 2014 and pay producers a 2p/litre bonus on every litre supplied above last year as long as a 2% trigger is exceeded.
The payments will be paid quarterly in arrears and are not available to farmers under notice.
“As the 2012-13 milk year delivered one of the most challenging production periods ever, as this incentive uses the low 2012-13 milk year as its base, this should provide a valuable incentive potential,” said Dairy Crest Direct.