MOZZARELLA MAKER Dansco has become the first milk buyer to announce a price cut for 2005.
The Carmarthen-based business said it had resisted downward price pressure during the summer but its current price was no longer sustainable and would be reduced by 0.45p/litre from January.
Managing director David Neill admitting that demand was increasing but said 40% cuts in EU export refunds for the cheese since April hade made some markets like the Middle East unviable.
He said EU manufactures were now trying to regain those volumes on the home market but buyers were screwing down prices in response.
Producers on level and seasonal contracts will receive 17.73p/litre and 17.43p/litre respectively for a standard litre (1m litres, 4% butterfat and 3.3% protein on EODC).
A supplier who did not wanted to be named said the cut was ridiculous and could force some farmers to leave the industry.
He said milk producers supplying the firm needed to form a unified body that could negotiate more strongly over prices. At present, farmers are split by the firm into small groups.