CUMBRIAN dairy farmers supplying co-operative Arla are set to see a 0.63p/litre price reduction in July after the co-operative said it was still feeling the effects of a demand shortage caused by the coronavirus shutdown.

But one of the major players in the Cumbrian dairy industry, First Milk, has announced it will be holding its July farmgate milk price.

The benchmark manufacturing price for conventional milk for Arla farmers will fall from 29.89p/litre to 29.26p/litre as of July 1.

Organic producers will see their standard manufacturing price fall from 38.93p/litre to 37.62p/litre.

Prices quoted include the bonus for farmers who have completed their Arlagarden and Climate Check data.

Graham Wilkinson, UK agriculture director at Arla, said: “Despite significant redeployment measures and the start-up of the food service sector, our organic demand continues to be disproportionally affected by the Covid-19 disruption.

“Therefore, regrettably, we need to reflect the lower returns in our organic milk price while continuing to work with our customers to try to minimise the Covid-19 impact.

The move sees Arla retain its spot as the top-paying processor, but the cut is in contrast to a number of other dairies that have said they will increase prices next month.

These include Grahams, which will increase its price by 1p to 25.5p/litre, to bring it back to where it was in March.

Medina Dairy, one of the lowest-paying processors, also added 1p/litre back on to its milk price last week, bringing it up to 21.75p/litre. It shaved a total of 5p/litre from its milk price in April and May.

First Milk, owners of Lake District Creamery at Aspatria, has this week announced that it is holding its milk price for July 2020 at the current level.

This means its liquid standard litre will remain at 26.75ppl, whilst its manufacturing standard litre will remain at 27.63ppl, both including its member premium.

Jim Baird, vice chairman and farmer director, said: “The backdrop of uncertainty resulting from the ongoing COVID-19 pandemic means that it remains hard to predict the likely impact on milk prices going forward.

"Despite this, we will continue to do all we can to provide as much stability as possible for our members, whilst working to maximise returns.”