Müller suppliers will be hit by a 1p/litre price cut for milk delivered in December.
This takes the Müller Direct standard litre price to 28.5p/litre.
As a non-co-op, the processor has to notify producers of price changes with a month’s notice, in line with the Voluntary Code.
Stronger-than-forecast milk production from farms, coupled with a significant weakening in demand for dairy commodity products, has affected market returns for a number of months, said the firm.
A further 14% downward correction in the value of both cream and butter during October has been recorded by market analysts at levy board AHDB.
“In the context of a sustained decline in returns from markets for cream and butter, a 3% reduction in our farmgate milk is a proportionate response,” said Rob Hutchison, Muller’s milk supply director.
“Müller is a resilient business, but we cannot ignore significant changes in the markets we serve.
“We place importance on doing what we can to protect farmers from the effects of extreme market volatility. That’s why we have options in place for farmers who want to hedge against market movements, including the Müller Direct Fixed Price Contract and the Müller Direct Futures Contract.”
Muller’s farmgate price was unchanged for November, as are prices for the two largest co-ops, First Milk and Arla, which are not obliged to report December prices until the end of November.