Arla Foods has handed a rare boost to dairy farmers after announcing an increase of 1p a litre in the rate it pays milk suppliers.

The Scandinavian dairy giant will now pay members of its Arla Foods Milk Partnership 27p per litre, with the price rise taking effect from 13 October.

“Following positive discussions with our key customers we have informed members that we will be increasing our price by one penny per litre to 27ppl,” said Arla UK deputy chief executive Hanne Søndergaard. “[This] is in addition to the increase to the volume bonus that we introduced from the beginning of this month.”

She added: “We recognise that there is volatility in the marketplace and will continue to monitor developments, and on-farm costs, to ensure that our milk price reflects market conditions.”

AFMP chairman Jonathan Ovens added: “This increase… offers an important boost to members as they move towards the winter facing further on-farm cost rises.”

Last week Tesco announced that it was upping its rate by 0.75p per litre to a new mark of 28.75ppl to help milk suppliers address rising costs.