FIRST Milk has announced further cuts to the price it pays for its milk from December 1.

Its standard litre price will fall by 1.4ppl to 22.7ppl and its manufacturing pool price by 1.8ppl to 24ppl.

Sir Jim Paice, chairman, said the main cause was that liquid and cheese returns had fallen over the last month. "With cheese specifically, this impacts not only on what we are selling now, but on the price that we can sell our cheese stocks in the future," he said.

"Additionally, we have been processing the majority of surplus milk supplied this year into skimmed milk powder. Returns from this market have declined further over the last month as many companies, particularly in mainland Europe, have increased stocks.

"The harsh reality is that prices are continuing to fall for dairy products everywhere in the world. As a board we have to balance the interests of individual farm businesses with the interest of the business owned by the same farmers. We have to set prices which reflect what we can achieve for the eventual product."

Arla, which buys milk from one in four of UK dairy farmers is cutting its direct supply figure by 3ppl to 24.8ppl from December - it follows November's 3ppl price cut.

However, Dairy Crest will hold its current milk prices during December - Davidstow at 29.04ppl and standard liquid at 27.04ppl - and Muller Wiseman will also holding its own at November's levels.