Milk producers are set for another hammer blow, as three of the bigger hitters have announced their milk prices will sink even further in the next few months.

Arla, First Milk and Muller have all confirmed their prices will reduce.

Arla has announced a 3.52p per litre decrease for March, for both conventional and organic milk, to 44.95ppl and 49.73ppl respectively.

The dairy cooperative, which is supplied by 3,000 UK farmers, warned that consistently high inflation continued to drive a reduction in consumer demand.

Arla added that shoppers were set to lower their overall grocery spend.

“Additional milk volumes are driving a continued decrease in commodity prices and the prices for EU and world commodities are now, broadly, on par," said Arla Foods director, Arthur Fearnall.

"Consumer consumption for organic is also continuing to react to the high inflationary landscape. The outlook is negative.”

Paul Savage, agriculture director for Arla UK, added that the uncertain economic outlook meant Arla was currently facing a 'challenging' commodity market.

“As the cost of living crisis continues consumers are buying less and, as a result, we have seen a reduction in European dairy consumption by approximately 5%.

"The economic outlook remains uncertain and while we have seen the first signs of stabilisation in the Global Dairy Trade, we are still facing a challenging commodity market, especially as milk volumes continue to increase overall."

First Milk has announced that its milk price from April 1, 2023 will reduce by 3ppl, taking its price to 42.69 ppl for a manufacturing standard litre, including the member premium and regenerative farming bonus.

Commenting on the announcement, Robert Craig, farmer director and vice-chairman, said: “Whilst dairy markets appear to have stabilised a little in recent weeks, there remains a significant disjoint between market prices and current farmgate milk prices. As a result, we must adjust our milk price to reflect the market returns. We know that this will be unwelcome news and we will continue to work to maximise our members’ milk price in the coming months.”

Dairy farmers supplying Muller who meet the conditions of the processor's Advantage scheme will see a further milk price fall for April. Those producers who follow the programme will see their milk price fall to 42.5 pence per litre from April 1, 2023. This is a 1.5p per litre decline compared to the month before.

Richard Collins, head of agriculture at Müller Milk & Ingredients, said the news came amid continuing market pressures: “As we work to ensure security of supply for the millions of shoppers who purchase the dairy products we make, every day, we are continuing to face into market pressures and supply is ahead of forecast.”

The move means its milk price on a manufacturing standard litre will sit at 45.69p per litre, including the member premium.