Robert Wiseman Dairies is expected to announce an ex-farm milk price cut of 0.9p/litre tomorrow (Tuesday), according to industry sources.
The company is expected to blame the widening differential between it and its main competitors in the liquid milk market, as well as falling cream values.
The price cut, expected to take effect from 1 August, will affect its 800 farmer suppliers.
First Milk members are also likely to be hit, as Wiseman buys 25% of its output.
The news follows another big cut, announced on Friday, when Dairy Crest said it would cut the price it pays for milk for cheese by 0.75p/litre, also from 1 August.
Arthur Reeves, Dairy Crest’s milk purchasing director, said the company had no alterative but to reduce the milk price.
Over the past few months, bulk cheese prices had fallen by about £200/t, and the MDC’s milk for cheese value equivalent had fallen 2.4p/litre, he added.
“The mature cheese market has also suffered.
“But there are signs that a bit less cheese is being made.
“The milk supply is down, and during the spring flush a lot of milk was turned into butter/SMP due to falling cheese returns and growing stocks.
“Such changes don’t feed through for three to four months, but it’s possible the market is near the bottom.”
Tom Hind, NFU chief dairy adviser, described Dairy Crest’s cut as drastic.
“While you can’t deny some of the market realities, that doesn’t make it any easier, especially for producers supplying Davidstow.
“This is a bitter blow. There may be some indication of stability, but at a totally unsatisfactory level.
“People have got to wake up to this.”