Arla's milk price for May 2021 will increase to 32.79 pence per litre as the market outlook looks 'stable'.
Arla Foods' on-account prices for conventional and organic milk will increase by 1.5 euro cents per kilo - equivalent to 1.40 pence per litre - from 1 May 2021.
This takes the co-operative's conventional milk price to 32.79 pence and organic milk to 41.15 per litre for farmers.
Arla Foods amba board director, Arthur Fearnall said this would be 'welcome news' for farmer owners who were becoming 'increasingly pressured by rising on farm costs'.
He added: "Commodity market prices have remained relative stable in the last month supported by healthy demand and our strong operations. The current outlook is stable.”
Alice Swift, UK agriculture director at Arla, said that ensuring the most value for farmers for the milk they produced was 'crucial'.
"The increase is testament to a strong business strategy, as well as the continued commitment of our farmer owners to industry leading animal welfare standards," she added.
Arla farmers are paid on constituents via a manufacturing schedule. For ease of comparison, the liquid price is 31.55 pence per litre based on 4% fat and 3.3% protein.
Manufacturing price based on every other day collection, top quality, one million litres, 4.2% butterfat, 3.4% protein.