Dairy co-op Arla has given its 3,000 farmers the first milk price rise in more than a year.
Arla’s UK standard litre price will rise by 0.83p/litre to 25.8p/litre from 30 March, reflecting the steady improvement in dairy markets.
The Global Dairy Trade (GDT) auction bounced back 35% since December before falling last week, while British commodity markets have also crept up.
But Arla’s news also underlines the impact the euro weakening dramatically against the pound over the past 12 months.
The co-op’s price is rising by 1.5c across Europe, which would have been meant a 1.25p/litre for UK producers a year ago.
Arla head of UK milk and member services Ash Amirahmadi said the upward trend in the markets had been due to sliding production in parts of Europe and New Zealand.
“GDT auction prices reduced in the last auction and, consequently, there is uncertainty as to whether the positive trend in 2015 is sustainable,” he said.
“The impact of the abolition of quotas post April will be a key factor in this.”
Arla has launched two branded products in the UK since the start of the year.
In January, the co-op launched quark-based Arla Protein and a fortnight ago released Skyr, an Icelandic-style yoghurt.
It is also running a nationwide bus tour to promote its cheddar brand, Anchor, encouraging Brits to eat more cheese sandwiches.