First Milk has dropped both its milk prices from September as the slide in dairy commodities shows no sign of stopping.

The dairy co-op has cut its manufacturing contract by 0.5p/litre to 29.6p/litre and its liquid price by 0.65p/litre to 28.1p/litre.

It has now reduced its prices for the fourth month running, with the manufacturing price down 3.4p/litre since May and the liquid contract 4.4p/litre lower.

World dairy markets continued to tumble in July, as prices on Fonterra’s Global Dairy Trade auction fell 8.9% to hit the lowest point since December 2012.

First Milk chairman sir Jim Paice said the falling wholesale prices and decline in UK market returns were to blame.

See also: First Milk slashes prices for August

“We have highlighted the falling global and European prices in our member communications over the last few months and unfortunately at this stage there is no sign of a turnaround,” he said.

“We will continue to monitor returns closely and report back to members each month.”

In the past fortnight, Arla cut its member milk price by 0.94p/litre for August and its direct supplier price by 1.2p/litre from September.

Dairy Crest dropped both its liquid and Davidstow manufacturing contracts by 1.1p/litre, while Glanbia, Wyke Foods, Crediton Dairy and Belton cheese also announced cuts.

Milk production across the world remains strong, putting further pressure on commodity prices.

UK production is running about 8% up on the year and Ireland’s farms turned out about 10% more milk in April, May and June compared to 2014.

Last week, New Zealand dairy giant Fonterra cuts its milk price forecast for the 2014-15 season by 14%.

The co-op’s chairman John Wilson said bigger inventories in China, falling demand in emerging markets and a strong New Zealand dollar would lead to lower returns.

New Zealand milk production in the year ending 31 May was 8.3% higher than the season before.