Dairy processor Muller has said it is not going to proceed with a 1p/litre price increase for producers from 1 May, after a fall in the value of bulk cream and butter.
The standard liquid litre price will be held for May and June at 26.25p/litre, including the 1p/litre Muller Direct Premium.
Muller had previously announced at the end of March that it would be increasing the price following strong consumer demand in supermarkets.
However, since then it has asked farmers to cut output by 3% as dairy commodity prices fell significantly, and the firm says there is currently no prospect of significant improvement in values – making a price increase unviable.
Rob Hutchison, operations director at Müller Milk & Ingredients, said: “The coronavirus challenges facing the dairy sector are well known and, as we head closer to the spring flush, when farm milk production peaks, there is more milk being produced on farms than there are markets for it.
“Our core focus on the retail sector and determination to maintain our obligations to feed the nation will continue and while we are not immune from dramatic dairy market changes, we aim to provide as much stability as we can during this extraordinary period.”
Last week, rival processor Arla cut its milk price for May by 0.9p/litre to 29.89p/litre, also citing the fall in value of commodities.
Dairy website milkprices.com has reported the price of spot milk has continued to make a slow recovery, with prices reaching 23p/litre delivered last Friday (24 April), albeit on thin volumes.
This was up from 14p/litre at the beginning of the week.