Dairy analysts are predicting a period of stability for liquid milk suppliers despite another round of milk price cuts.

Over the past week, a number of processors have announced cuts to the milk price they pay farmer suppliers. Robert Wiseman Dairies, First Milk and Milk Link have all cut prices 1ppl from 1 May in the latest in a string of processor cuts since January.

However, in a move analysts say indicates price cuts are levelling off, Wiseman offered a guarantee it would make no further reductions until at least 31 July 2009. Similarly, Müller, which has announced a 0.3ppl milk price cut, said it would hold its price until 1 September.

Meanwhile, Milk Link approved a £4.1m member processing interest payment relating to 2008/09, representing a 10.8% return on members' balances.

An industry source claimed this week's cuts heralded a period of calm for the industry. "The market will solve this issue," he said. "There looks like more stability with processors guaranteeing their milk prices for the next few months."

The market has also been stabilised by the EU's intervention in March to reduce the oversupply of dairy products. "The market is now pretty stable. It's been supported by the intervention system and exports are picking up," said PTF dairy analyst Michael Bessey. "We've been protected by a reasonably steady liquid market and the value of the pound."

Robert Wiseman predicted that a more closely matched global supply and demand situation would lead to higher levels of stability and confidence in the dairy industry.

Tension between dairy farmers, processors and retailers reached a new high last week when Dairy Farmers of Scotland and NFUS held protests and called for a date to be set for a Milk Summit to address issues facing producers.

They claimed their milk prices had been reduced by 20% since the start of the year, and declared the dairy industry to be in crisis.