Dairy producers supplying Arla are to see their milk price drop by 1p/litre from 1 June.
This will take the UK standard litre to 19.12p/litre – well below the cost of production for the majority of farmers.
This is as a result of a reduction in the Arla Foods amba on-account price reducing by 1.3c/kg (10p/kg).
The co-op is owned by 12,650 dairy farmers across Europe, including 2,700 members in the UK.
The company said that the market continued to be affected by the global imbalance between milk supply and demand, which was still putting downward pressure on milk prices.
Johnnie Russell, Arla Foods amba farmer board director, said: “Recent data suggests that the global growth in milk production is levelling off, which may lead to volumes stabilising later in the year.
“However, it is too early to predict whether this trend will continue over the coming months.
“Arla will continue to maximise the returns from the marketplace and provide a secure home for every litre of owners’ milk at one Arla price.
“The business is continuing to grow sales of branded products through increased marketing, as well as processing milk from our farmer owners into products for the foodservice sector.”
Earlier in the week the head of Arla’s European business reiterated that the co-op would continue to pay all its members the same price, regardless of what they supplied.