Muller Wiseman Dairies flag© Tim Scrivener

Muller Milk and Ingredients (MM&I) has raised its standard milk price by 1.5p/litre. However, producers can expect less from their retailer supplement.

The supplement, paid by Aldi, Lidl and Morrisons is estimated to be 2p/litre for November – a 0.894p/litre drop on what was paid in July.

The price increase, which affects the 800 producers of the Muller Milk Group and the 650 ex-Dairy Crest-owned Direct Milk DPO producers, means non-aligned dairy farmers will receive 20.94p/litre for their November milk before the supplement.

See also: Milk contracts: what farmers need to check

The announcement completes the price harmonisation of MM&I’s two farmer groups whose prices had differed by 0.371p/litre in October.

This is the second consecutive rise from MM&I, which will also raise its October milk price by 1p/litre.

Lagging behind spot prices

Although farmgate milk prices are rising across the board, they are far outpaced by spot milk prices, and the average dairy farmer is still paid 4p/litre below the cost of production.

“We will continue to reflect improved returns within our business,” said Lyndsay Chapman, agriculture director for MM&I.

“But it’s important to stress that we must be competitive in comparison to other organisations who offer their farmers different levels of milk price returns, or choose to retain rather than pass on the extra supplements they are receiving from retailers.”

“This approach helped to protect our farmers during the worst of the downturn and we intend to ensure that we maintain our milk price track record as the market picks up.”