Dairy Crest Direct’s formula milk price will reduce by 0.144p/litre to 31.938p/litre from 1 November.
Despite a £20/t increase in wholesale cream values to £1,740/t, a £14/t reduction in concentrate costs had resulted in the drop to the formula price, the company said.
Launched in March this year, the contract calculates a monthly milk price via a formula tracking five key costs: bulk cream, retail liquid milk (four pints), concentrates, fertiliser and red diesel.
Following a first-come, first-served application process, 175 farmers signed up all or part of their milk supply to the formula contract. It was intitially open to 100m litres of milk.