An experienced source involved in negotiations between farming groups and retailers said they had “never known retailers to be more receptive to a milk price increase”.

Recent bilateral discussions between one farming association and individual retailers and processors have sought to lay foundations to improve milk producer earnings.

Retailers and dairy processors have come under intense pressure recently over their dealings with dairy farmers, and the UK Competition Commission said last week it would examine the sector further as part of its grocery supply chain probe.

Average farmgate milk prices have fallen to below the cost of production for some farmers, while supermarkets have increased profits from liquid milk sales over the last decade, figures show.

Source: Dairy Reporter.com