Dairy processor Lactalis has announced significant milk price increases for November and December, meaning its prices have increased for six months in a row.
A previously announced 1p/litre rise will be doubled taking the November price to 23p/litre, matched by a further 2p/litre increase the following month, taking prices to 25p/litre from 1 December.
The increase will match the 25p/litre cost of production estimate created by Kite Consulting last month and puts Lactalis ahead of the majority of UK processors who pay about the 21-22p/litre mark.
“In support of the farming community and despite the challenging market, we predicted a strong recovery by the end of the year and have worked hard with farmers and suppliers to deliver just that,” said Matt Friel, head of milk supply at Lactalis.
He added “We now need to see the market continue to respond positively.”
The processor, whose headquarters are in France, said a combination of cost reduction programmes and efficiency savings, strong domestic sales and progress with exports abroad were contributing to driving farmgate prices upwards.
Lactalis predicted the market would continue to recover towards the end of next year as it adapted to changes in supply and demand.