UK dairy company Freshways has written to its farmer milk suppliers to inform them that it will only be able to pay for 60% of their milk over the coming months.

In a letter seen by the Irish Farmers Journal, Freshways managing director Bali Nijjar said the company had lost 40% of its business following the closure of restaurants, hotels and cafés due to the COVID-19 lockdown in the UK.

As a result, Nijjar said his company would pay a milk price of 23.4p/l (26.8c/l) on 60% of the milk supply that farmers had previously been allocated over the next few months.

Any milk produced by dairy farmers that goes over this threshold will have to be sold on spot markets (which are now trading at 0-5p/l) or will have to be dumped.

After looking at all the options available, Freshways said it feels the above solution was the fairest option for all of its milk suppliers. The company said it would look at raising the volume of milk it could take as businesses begin to reopen and COVID-19 restrictions are lifted in the UK.