Meadow Foods has announced it is increasing the A-litre milk price by 2p/litre over the next two months.
In a text message to suppliers, the dairy said there would be a 1p/litre rise from 1 July and a further 1p/litre from 1 August.
This will take the standard litre milk price to 19p/litre, following a 1p/litre drop which took effect from 1 June.
The company is also forecasting the B-litre price for July and August will be “significantly improved”.
Simon Chantler, executive chairman at Meadow Foods, said: “We are starting to see the green shoots of recovery in the price we are able to pay for our milk and wanted to pass this on to our producers as soon as it was possible.
“Although there is still some way to go before the pressure is lifted from producers, we feel that the slowdown in EU milk production over the flush period, a general tightening of supply are offering a better market outlook.
“These developments are the most positive we have seen for a number of months and this has led us to adopt a more optimistic position for the recovery of milk prices in the medium term.”
Meadow Foods has about 550 suppliers, based across the north of England, Midlands, north and west Wales, and is the UK’s largest independent dairy.
The company was criticised at the start of the year for posting pre-tax profits of £13.7m while paying farmers one of the lowest prices in the market.
However, the announcement has been welcomed by farmer suppliers, posting on social media, who say it is a move in the right direction.