Meadow Foods is the latest milk processor to up its milk price as the drought increases fears of a shortage of milk this winter.
The milk buyer increased its standard A litre milk price by 1p/litre from September.
Its 650 producers will receive 29.5p/litre for milk with a constituent content of 4% butterfat and 3.3% protein from next month.
The company, said Meadow Foods chief executive Mark Chantler, was acutely aware of the pressure the recent hot weather and lack of rain is putting on forage stocks and although this has not significantly hit milk volumes yet they may be affected in the future.
“We do remain focused on the overall dairy market which are currently giving some mixed messages on prices – with protein prices showing some signs of improvement but cream prices remaining unsettled,” added Mr Chantler.
“We will continue to carefully monitor how both supply and demand develop over the next couple of months and react accordingly.”
Last week, leading UK private equity firm Exponent acquired Paine Schwartz’s entire holding in Meadow Foods, reported in Farmers Weekly two years ago to be a 35% shareholding in the company.
Since Paine Schwartz’s initial strategic investment in 2016, the processor has invested heavily in its production facilities, acquired Roil Foods and Fayrefield Liquids, the latter adding 150 dairy farmers to its books.
Mr Chantler added this investment marked another step in the growth trajectory of Meadow Foods.
“Exponent and the management team have a clear vision for what we want to achieve with the company and we’re excited to get on and deliver for the benefit of all the company’s stakeholders, suppliers and business partners,” he said.