Meadow Foods is increasing its farmgate milk price by 1 pence per litre, to 30ppl, from 1 January.

The new standard-litre price will apply to all of the 530 dairy farmers that supply Meadow Foods with about 500 million litres of milk a year.

The company’s executive chairman, Simon Chantler, said it had been able to increase its price to farmers because it was now receiving better returns from its food industry customers. The wet summer this year had had a negative impact on milk volumes, he added, warning the market would remain challenging into 2013.

“We appreciate that milk production is tough at the moment, but we will continue to listen to our farmers and push our customers for further increases to ensure supply,” Chantler said.

Meadow Foods supplies dairy ingredients to the food industry. It recently announced plans to expand its production site at Chester as it looks to increase its producer base by as much as 500 million litres.