Farmers supplying Muller who meet the conditions of its Advantage scheme will receive an additional 1ppl increase from January, on top of the 2ppl rise the processor had previously confirmed.
Dairy producers who follow the Advantage programme will see their milk price rise to 33 pence per litre from 1 January 2022, Muller said on Friday.
The processor had already confirmed a 2ppl increase for January in November, but the additional 1ppl comes due to "rapidly rising on farm production costs."
In a further measure, Lidl GB has ensured that Muller farmers who opted to benefit from a three year fixed price contract for up to 50% of their milk supply will see this fixed price temporarily increase by 4ppl to 33ppl from the same date.
The dairy company said the price will be reviewed in the spring and considered in line with the economic conditions and farm production costs at that time.
The Fixed Price Contract Option, relaunched by Lidl GB and Muller in May at 29ppl, is designed to help farmers to manage price volatility and gain long term financial certainty.
Rob Hutchison, chief operating officer at Muller, said: “As the dairy supply chain meets the challenge of unprecedented increases in costs, we will continue to do everything we can to support farmers who supply us.
“The commitment to the dairy industry from Lidl GB to increase the value of the fixed price contract, an important and valuable hedge against milk price market volatility also recognises the current pressures facing farmers.
“There is no doubt that the whole supply chain is working in an environment which no-one could have predicted," he explained.
“We will of course continue to monitor and manage the issues facing our supply chain in the coming months."
