DAIRY farmers supplying Arla will have more than 1ppl cut from their farmgate price from Monday – and Muller has announced a 1ppl cut from August 1.

The Arla announcement was immediately condemned as "yet another body blow to dairy farmers" by Rob Harrison, NFU dairy board chairman.

The new price of 23.81ppl is due to Arla's own one eurocent (0.77p) per kilo cut combined with a 0.41p cut in the exchange rate due to the strength of sterling.

The co-operative has also announced it will reduce the amount it pays its direct suppliers who are not members of the co-operative by 1ppl to 22ppl from August 1.

Ash Amirahmadi, Arla's head of UK milk and member services, said: "Commodity markets are continuing their downward trend, despite only a minor reduction in prices in the latest GDT auction.

"While we have taken significant mitigating actions, the impact has been felt on our traded business and more recently on European markets which are also in decline.

"Unfortunately, these factors are affecting the entire dairy industry and despite our efforts it has not been possible to buck the trend. I can confirm that our customers in the UK are supporting us at this very difficult time for our members."

But Rob Harrison, NFU dairy board chairman, said: "This is yet another body blow to dairy farmers whose businesses have been in utter turmoil for the past 12 months, with 450 quitting dairy farming since this time last year in England and Wales.

"The recent series of cuts have highlighted the need for short-term solutions to address the problems happening now – farmers need urgent help from industry and Government."

He said Government should put long-term solutions on the back seat.

"We need them to insist on best practice in the supply chain, look at growing dairy consumption and supporting more investment in dairy processing in the UK – and this needs to happen now," he said.

"We also urgently need milk-buyers to be more transparent in pricing. We need all processors to improve transparency in pricing and must stop idly following one another to the bottom; this is a dire situation and we need to see the dairy industry pull through this period of volatility. "Government has a role here in insisting processors provide up-to-date market and production data so that the whole supply chain can better understand what’s happening and how to manage risk in the future."

On Wednesday, Muller UK and Ireland confirmed its milk price would be cut to 23.15ppl from August 1 – its first change for five months.

Martin Armstrong, head of milk supply, said: "All around the world, the imbalance between supply of milk and demand for dairy products is weighing heavily on milk prices.

"We cannot buck this market but we will continue to invest to increase the range of added value dairy products which we supply."

Philip Rowney, chairman of the Muller Wiseman Milk Group which represents dairy farmers who supply the company, said: "Members have already had to accept significant reductions in their milk price and this news will not be welcomed.

"We will continue to work with Muller to maintain as much stability as possible during what is an extremely volatile and damaging period for the British dairy farming industry."

n First Milk introduced a 1ppl price cut for its suppliers on July 1 and Sir Jim Paice, chairman, announced he would stand down once a replacement is found.