Some farmers will face their lowest standard litre price in nine years as Muller slashed May milk cheques a further 0.85 pence per litre.
The third price cut this year means Muller Direct Milk farmers, formerly of Dairy Crest Direct, will see prices fall to 18.49ppl while Muller Milk Group farmers will see a price of 19.15ppl.
The cut for Direct Milk farmers takes prices below 19ppl for the first time since June 2007. Prices for these farmers have fallen more than 14ppl since the market peaked less than two years ago.
Retail supplements are expected to boost milk cheques. In the latest milk payment these were worth an additional 1.89ppl to those on non-aligned contracts.
Muller pointed to the ’continuing extreme market volatility’ in announcing the cuts.
Lyndsay Chapman, agriculture director of Müller Milk and Ingredients said: "Market returns continue to be severely depressed creating an increasingly difficult trading environment as we approach the peak period of milk production.
"As a result, we unfortunately have to reflect this through a further reduction to our milk prices for May.
Direct Milk, Muller’s Dairy Producer Organisation, recognised the need for the supply chain to remain competitive but pointed to the ’inevitable long-term damage’ which would be caused through milk prices being at their current deficit.
Following the announcement, NFU Scotland pointed to the ’unprecedented depth’ of the current dairy industry crisis.
NFU Scotland’s milk policy manager, George Jamieson, said: "This latest cut by Muller means more than half of Scotland’s hard-pressed dairy farmers are entering the spring on a milk price that is below 20ppl.
"[It is] a staggeringly poor return for the work and effort which goes into producing fresh milk and dairy produce, further undermining confidence in the future of the sector in Scotland."