Crediton Dairy has guaranteed a minimum price to its farmers of 30ppl for the remainder of the year in an effort to offer farmers some certainty as costs rise on the back of the heatwave.
The dairy wrote to its suppliers confirming a 1ppl increase for September, taking its liquid standard litre price to 30ppl.
A spokesman said: "We remain confident that milk prices will remain strong for the rest of 2018 and as such we have committed to a standard litre farmgate price of 30.00ppl as a minimum for the rest of 2018.
"Naturally, should markets strengthen again we would expect our price to increase further.
"We are very aware of the huge cost pressures on-farm as a consequence of the drought. As such we have taken this decision to give some certainty about milk price until the end of the year."