Lakeland Dairies has cut its August milk price by 1.5c/l to a base of 32.38c/l excluding VAT.

Lakeland is the first processor to set a price for August and, in a worrying development for the sector as a whole, Lakeland said in a statement that the price paid reflected "market conditions".

In Northern Ireland, a base price of 27.25p/l will be paid for milk supplied in August. This represents a reduction of 1.25p/l on the July price.

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Global markets

"The global dairy market remains under pressure, with resilient supplies being met by continued weak demand," a Lakelands spokesperson maintained.

"Sentiment and activity among buyers remain subdued, which is being heightened by weakening economies in parts of the world," the co-op explained.

"Lakeland Dairies continues to closely monitor the markets in order to return the best price possible," the statement added.

Lakelands' decision will be a further blow for embattled dairy farmers who have endured a collapse in milk prices this year.