Robert Wiseman Dairies is set to increase the price it pays suppliers for their milk to 26.2p/litre from 1 May.
The 0.5p/litre increase comes despite confirmation from the processor that it faced pressure from the rise in cost of plastic and oil, as well as a fall in the value of bulk cream.
Pete Nicholson, Wiseman’s milk procurement director, said the whole supply chain was “under significant pressure” from rising costs.
“Ordinarily, this would have triggered an automatic reduction in price, but with farm input costs continuing to rise and UK milk supply tightening, we want to send a clear signal to our farmer members,” he said.
“We believe it is necessary to move the milk price forward in order to ensure that our price remains competitive, and instil continued confidence in our supply base.”