Dairy farmers should be paid more money for their milk because costs have risen so dramatically over the past year, according to a new survey.

Despite recent farmgate milk price rises, the Royal Association of British Dairy Farmers is calling for a further 3.5p per litre hike to cover farmers' cost inflation. The association says production costs have risen 16% from 18.3 to 21.3ppl on the back of costlier labour, animal feed and energy. The average milk price for farmers is 17.9ppl.

"The increasing trend will continue in the forthcoming year and farmers will also be faced with substantial additional regulatory costs," said RABDF chairman Lyndon Edwards.

He welcomed Tesco's move to offer a price of 22-23ppl to 1,000 dairy farmers, but said this alone was not enough. "It is of paramount importance that the remaining retailers and other parts of the supply chain follow suit in order to ensure the long-term viability of the whole dairy industry."