Muller, the UK’s second largest milk processor by producer numbers, has dropped its standard milk price by 1p/litre from 1 March.
The cut means the 700 Muller Direct farmers will receive 28p/litre for standard litres (4% butterfat, 3.3% protein).
The 3.5% price cut takes the price paid to Muller non-aligned producers to just 0.49p/litre ahead of 12 months ago, when average farmgate milk prices were heading in the opposite direction.
Muller, like Arla in its recent price drop, cited a weakening of UK dairy wholesale markets as the reason for the reduction.
January witnessed drops across the board for average UK dairy commodity prices, with bulk cream falling 14% to £1,550/t, butter sliding 9% to £3,660/t compared with December 2017 according to AHDB Dairy.
Skim milk powder hit its lowest average price since the levy board began recording prices in July 2000, down 6% on the month to £1,160/t.
“Weaker dairy commodity prices coupled with higher levels of off farm production, are combining to put pressure on farmgate milk prices at the moment,” said Rob Hutchison, Muller milk supply director.
“We continue to place a focus on adding value to the milk that we buy by increasing the portfolio of Muller-branded and private-label products we make.”
Mr Hutchison added: “This gives dairy farmers greater protection from the full impact of these cyclical market challenges.”