Muller UK has decided to cut its standard milk price by 0.85p/L (1.07c/L) from May 1, 2016.

The average standard liquid milk price for Müller Milk and Ingredients will be 19.54p/L (24.73c/L) for May.

Muller has said that it has cut the milk price due to the continuing extreme market volatility coupled with high levels of global milk supply.

Lyndsay Chapman, Agriculture Director of Müller Milk and Ingredients said that market returns continue to be severely depressed creating an increasingly difficult trading environment as we approach the peak period of milk production.

“As a result we unfortunately have to reflect this through a further reduction to our milk prices for May.”

Milk price reflects the balance of supply and demand and all of us in the dairy sector desperately need a significant improvement in this balance to generate better returns.

“Regardless of the overall market environment, we will maintain our commitment to a competitive and clear farmgate milk price and contract proposition for the dairy farmers who supply us, ensuring that the headline price which we offer correlates to the returns which dairy farmers can expect.

“We are also committed to the principles of the voluntary code, so will always seek to provide 30 days’ notice of price adjustments.”

Earlier this month, Arla Foods cut its its on-account milk price for April by 0.75p/l, the equivalent of 0.94c/L when converted to euro.

Arla said that this latest reduction, coupled with the impact of exchange rates, reduces the UK standard litre price for conventional milk down by 0.94p taking it to 20.87p/L (26.41c/L).

Arla UK held its milk price for March at 21.81p/L (27.62c/L).