UK farmers have been "stunned" by First Milk's move to reduce November farm-gate milk prices, despite "positive movement" on the global commodities market for dairy products.

The UK's largest dairy cooperative today (29 October) announced that it would reduce its November standard price for milk to 21.4 pence per litre.

A spokesperson for the company said the main reason for the reduction was continuing price pressure in the cheese market.

"Retail cheese prices are under pressure, largely due to competition from cheap imports. Retailers have also been trying to press down prices and increase promotions in response to the difficult economy," the spokesperson observed.

However, the National Farmers Union in Scotland said that it was "stunned and dismayed" by the announcement.

"While most milk purchasers continue to dither, this First Milk announcement of a price cut comes as a real blow," said president Jim McLaren.

"The market fundamentals are all pointing to significantly better prices for milk and dairy products and we are demanding that milk processors quickly share improving returns with those who supply them with milk," he added.