Farmers have welcomed Morrisons' plans to extend support for the UK dairy industry.

The UK retailer said it will offer local milk at its stores at no extra cost to consumers and set up a producer group to help shore-up its milk supply.

The group has also "taken steps" to increase returns to dairy farmers through its two liquid milk suppliers, Arla Foods and Dairy Crest.

The National Union of Farmers welcomed these moves as a "step in the right direction".

"With milk production declining in the UK, Morrisons is sensibly seeking to secure their supply of milk," NFU dairy board chairman Gwyn Jones observed.

"The NFU vision for the dairy industry supported moves by retailers to get closer to dairy farmers in order to break down the barriers of mistrust, create clearer market signals and generate better transparency. In this respect today's (28 May) announcement is significant and welcome."