Meadow Foods is raising its farmgate milk price by 0.5p/litre from 1 February.
This means its 650 farmer suppliers will be paid 25.5p/litre for their standard A litres.
Meadow contracted volumes (A litres) include a tolerance of +7% to -7.5%, so the vast bulk of farm supplies to the processor falls within those limits.
Above these levels, a B milk price is paid, calculated through an amalgamation of market related, spot and trade prices as well as concentrate values.
“This means that the B price is more reflective of the market rate and can be higher than A price – as it often is,” said a spokesperson.
The B price changes each month, and for December was 24.4p/litre.
“December is always slightly lower due to the Christmas break and the weaker prices it brings. The estimated B price for January is 26p/litre,” said the spokesperson.
Mark Chantler, chief executive of Meadow Foods, said: “We are aware of continued pressures on farmers and are pleased to be able to pass on this price rise, despite the mixed messages on price we are receiving from the markets we sell into.
“The market is expected to remain challenging as we assess the implications of Brexit going forward, however, we will continue to carefully monitor how both supply and demand develop over the next couple of months.
“We will be meeting with our producers next month to share our views on the current market position and to listen to their perspectives.”
Meadow Foods supplies value-added ingredients to the food industry. It employs more than 400 people across four geographically widespread sites, and processes more than 650m litres of milk/year.