British farmers have been hit by yet another milk price cut, after Müller UK & Ireland announced it will be reducing its standard farmgate price from 1 March by 1.75ppl to 24.15ppl. The cut comes just days after Dairy Crest announced its own reduction, but Müller has pledged to continue paying the “leading price” to farmers of all major processors.

After holding its price for February at 25.90pp, Müller said today (5 February) it had since faced “a widening gap between its price and those offered by other processors, which could potentially affect Müller Wiseman’s ability to compete”.

Carl Ravenhall, MD of Müller Wiseman Dairies, claimed the price reduction reflected “further drops in the value of cream and butter products and the need to be competitive in the supply of dairy products to our customers”.

In an apparent swipe at rival processors, a statement added that Müller would seek to continue paying a leading “clean” price on all litres supplied by farmers. This means its farmgate price will not be further eroded by deductions or penalties “of the kind imposed by other purchasers including farmer owned co-operatives”, for balancing, haulage, capital contributions or mechanisms which pay full price on only a proportion of the milk which farmers supply, he said.

“We continue to take very difficult and painful decisions within our company to ensure that our costs are as low as they can be, but our business cannot compete if the cost of the milk that we buy from farmers is substantially higher than that of our competitors,” added Ravenhall.

Discussions between the Müller management team and its farmers had been “robust”, said Roddy Catto, the chairman of farmer representative body the Müller Wiseman Milk Group.

The talks “focused on ensuring that the company is fully aware of the trading difficulties faced by dairy farmers in these extremely trying times,” he added, but Catto recognised Müller’s commitment to pay “a leading price to dairy farmers”, and its need to “remain competitive in an environment where other processors are paying less for their milk”.

Rob Harrison, the National Farmers Union’s dairy chairman, described Müller’s reduction in order to remain competitive as “entirely unacceptable”.

“Müller Wiseman is a company with strong brands and a variety of markets for its product and decisions should be taken on their own performance, rather than following others on milk price,” he said.

“To see Müller declaring it is following others with price cuts is a deplorable change in direction,” added Harrison. “We need to develop trust between processors and farmers to ensure changes are reflected honestly and with clarity, ensuring that when markets do recover this happens quickly to stop farmers suffering.”

The reduction followed an announcement by Dairy Crest on Saturday (31 January) that it was cutting its farmgate price by a further 1.5ppl from 1 March to 23.09ppl for liquid milk contracts and 25.09ppl for farmers on Davidstow contracts. However, it has also pledged to hold its price thereafter until July.

First Milk will pay 21.57ppl to its manufacturing pool and 21.20ppl to its liquid milk pool from March (unchanged from February). Arla currently pays 24.81ppl for a standard litre, but is yet to announce its March price.

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