Arla's milk prices will drop significantly from 1 April as the co-operative has announced a huge 5.30p per litre decrease.
The dairy co-op's milk prices for April 2023 will decrease for both conventional and organic milk, to 39.64ppl and 44.42ppl respectively.
Arla warned that the severity of the ongoing cost of living crisis and volatile economic environment was continuing to negatively impact consumer demand for milk.
The co-op, which is supplied by 3,000 UK farmers, added that consistently high inflation continued to drive a reduction in consumer demand.
"Commodity prices continue to decline significantly especially as global milk volumes increase overall," said Arla Foods director, Arthur Fearnall.
"The outlook is moving towards stabilisation as commodity markets get closer to balance."
Paul Savage, agriculture director for Arla UK, added that milk supply in the UK had continued to grow in the last month, with milk supplies up 3.2% compared with March 2022.
"This increase in supply has not only been seen in the UK but also across Europe and the globe," he explained.
"When coupled with a decline in dairy consumption and an overall decline in shopping spending, with 75% of people cutting expenditure on food, this is creating a change in the supply and demand of milk.
"We recognise that some of our farmer owners continue to face increasing input costs on farm and as a farmer owned cooperative we are doing all we can to continue to support our farmer owners.”
