Dairy Crest is raising its non-aligned liquid milk and its Davidstow cheese contract prices to 29p/litre from 1 November.
The price rises affect 1,000 of the company’s 1,300 milk producers – non-aligned liquid producers will also get an increase to 28.25p/litre from 1 October.
“The increases reflect the expectations of improving returns from commodity markets and higher selling prices that Dairy Crest is seeking from its customers,” said a statement from the company.
“They are much needed to reflect the higher on-farm costs that all dairy farmers are currently experiencing following the difficult weather conditions this summer.”
Dairy Crest also claimed to be the first milk purchaser to implement the new voluntary code of practice for milk contracts and that its suppliers also benefitted from free farm consultancy funded by the company.
Ahead of interim results due to be posted on 8 November, Dairy Crest has issued a trading statement for the six months ending 30 September saying the first half of the year had remained challenging.
After adjusting for the disposal of its St Hubert French spreads business, profits would be down on the same period last year, but profit expectations for the full year ending 31 March 2013 remained unchanged.
The postponement of the August 2p/litre price cut had had a small adverse effect on profits in the period, it said.
Read more on our dedicated milk crisis page.