Meadow Foods will drop its standard A litre milk price by 1p/litre from 1 December, citing weakening dairy markets over the past three months.
The drop means Meadow’s 650 farmer-suppliers will receive 28.5p/litre from next month for milk with a constituent content of 4% butterfat and 3.3% protein.
The processor joins the likes of Muller, Yew Tree and Glanbia Cheese, which have all dropped farmgate prices for December as dairy markets continue to contract.
Tumbling cream prices have hit processors’ margins, which have shrunk by a third since August to £1.80/kg, according to a spokesperson.
“Milk volumes have performed well over the summer despite the hot weather and continue to remain relatively high,” said Meadow Foods chief executive Mark Chantler.
But, Mr Chantler added, the company would continue to closely monitor forage stocks moving into the winter and how this would affect supply in the new year and into spring.
The latest dairy wholesale price for October saw drops across the board for bulk cream, butter, skimmed milk powder (SMP) and cheese.
Bulk cream and butter saw the largest falls, losing 14% of their value compared with the previous month to £2,130/t and £4,750/t, respectively.
SMP and cheddar values both dropped by 2% to £1,410/t and £3,050/t, while this week’s Global Dairy Trade auction, an indicator of international dairy market sentiment, fell for the 11th consecutive fortnight, dropping by 2% to average $2,851/t (£2,191/t).