Müller has confirmed it is to reduce its Direct milk price by a further 1.25ppl from March.
The company says the reduction in the market value of farm gate milk follows a surge in milk production from farms, with the UK for December recorded by AHDB being its highest off-farm milk production levels for a quarter of a century.
This is the third reduction since December 2018.
Milk Supply Director, Rob Hutchison, said: “Supplies of milk from farms are well ahead of forecast and this is impacting the value of this milk. At times like this in the market cycle it is important that processors retain the flexibility to be able to offer different solutions.
“The Müller Fixed Price Contract is an innovative example and farmers who use this option have significant protection from this market volatility.”
The company reiterates that farmers who opted to use the Müller Fixed Price Contract Option, will see returns for milk supplied to the company maintained at 28.00ppl.
More than a third of the 700 Müller Direct farmers use this option which maintains this price regardless of market conditions.
