Aldi has set a new 28 pence per litre minimum price it will pay processors for liquid milk sold in UK stores.
The firm could not disclose how much of an increase this represented, but said the increase would be passed back to farm level.
The new ’price floor’ follows discussions with the NFU and comes as several retailers have announced measures aimed at increasing prices passed back to the farm gate.
Rob Harrison, NFU National Dairy Chairman, welcomed the move.
He said: "Aldi has shown it supports the farming community and has developed sustainable agreements with its liquid milk suppliers, in addition to its existing strong commitments to the farmers of Britain in fresh meat and produce.
"We will continue conversations with Aldi as to its position on cheese and other dairy products.”