Robert Wiseman has increased its farmers' pay by 0.5ppl to 26.2ppl.
The move, which has been backdated to 1 May, means the processor has raised its farmgate milk price by 40% since 2007.
Wiseman said it wanted to help alleviate the pressure farmers faced over rising costs. Its announcement comes a week after admitting its 2008 profits would be hit by market conditions and a fall in bulk cream sales.
Meanwhile Graham's The Family Dairy has also raised the price it pays to producers by 0.8ppl to 26.4ppl, benefiting 50 suppliers across Scotland.