The dairy said the drop reflected stronger than forecast production and weakening demand for commodity products
Muller has confirmed a price drop of 1ppl from December 1, taking its Muller Direct standard litre price to 28.5ppl.
It followed a price hold in November.
The dairy said it reflected stronger than forecast milk production from farms coupled with a significant weakening in demand for dairy commodity products has affected market returns for a number of months.
It added a further 14 per cent downward correction in the value of both cream and butter during October has been recorded by market analysts at levy board AHDB.
Milk supply director Rob Hutchison said: “In the context of a sustained decline in returns from markets for cream and butter, a 3 per cent reduction in our farm gate milk is a proportionate response.
“Muller is a resilient business but we cannot ignore significant changes in the markets we serve.
“We place importance on doing what we can to protect farmers from the effects of extreme market volatility.
“That is why we have options in place for farmers who want to hedge against market movements including the Muller Direct Fixed Price Contract and the Muller Direct Futures Contract.”