Dairy processor Muller has announced a 1p/litre milk price rise amid strong retail demand and lower-than-forecast supply due to cold weather.
The increase will take Muller’s milk price to 28.25p/litre from 1 June 2021.
The additional 1p/litre will only be paid to producers who meet the conditions of the firm’s Advantage programme.
The initiative aims to improve supply chain collaboration, herd health and reductions in environmental impact, according to Muller, which pays the extra 1p/litre premium in arrears annually in January.
Without the premium, the base price from 1 June 2021 will be 27.25p/litre for a standard litre.
A Muller spokesman pointed out that 96% of its 600 Muller Direct farmer-suppliers had opted into the voluntary scheme and were, therefore, eligible for the increase.
Requirements include managing and further reducing the use of antibiotics, sustainable sourcing of animal feed, reductions in energy and water use and recycling and enhancing biodiversity.
But the spokesman stressed that the premium was not available to the aligned milk pool.
Rob Hutchison, chief operating officer at Muller Milk & Ingredients, said the key driver for the milk price increase was a buoyant market.
“If this is sustained, we hope to build on this increase in the months ahead, as we continually monitor supply and demand.”
Mr Hutchison said the strong demand for liquid milk products had combined with lower spring milk volumes from farms due to recent colder weather to firm up prices still further.
Muller also recognises the challenges farms are facing with significantly higher feed costs as we head into summer, he added.