First Milk has announced that its member premium will increase from 0.25p per litre to 0.5ppl from April next year.
The member premium was introduced in April 2019, with the current payment being 0.25ppl.
The payment is pro-rata adjusted based on achievement of the farmer's capital target.
This announcement means that the payment from April 2020 will be 0.5ppl.
The dairy cooperative said the development is a result of 'good progress' made.
There has been a 'consistent delivery' of improved financial results due to business growth along with improved productivity, First Milk added.
Shelagh Hancock, chief executive, said: “First Milk continues to make good progress, with positive growth and solid trading performance.
“As a result of this improving position, I am pleased to confirm our intention to increase our member premium to 0.5ppl from April 2020, recognising and rewarding the loyalty of our long-standing members.”
Last month, the co-op announced that it is holding the milk price it pays to its farmer suppliers for October - at 27.45p per litre.