The Market Drayton-based dairy firm has blamed a further downturn in the market for dairy products for its decision to reduce its standard milk suppliers' price by 0.85p from May 1.

The move, caused by a combination of high levels of milk supply from farms and poor demand for dairy products, brings the price it will pay for a litre of milk to Muller Milk Group suppliers to 19.15p.

It also deals a blow to farmers who began supplying to the group following the acquisition of Dairy Crest's dairies operation on Boxing Day.

Muller Direct Milk suppliers – those who moved from Dairy Crest contracts – will now be paid 18.49p.

This follows a 1.35p a litre price cut previously announced by the dairy firm that will take effect from tomorrow.

The announcement comes a week after farmers from Shropshire joined thousands of others from across the country in a march in London calling for changes in the industry.

Richard Yates, Shropshire chairman of the National Farmers' Union, said: "It's absolutely devastating news once again for the British dairy farmers, and another nail in the coffin for our dairy industry.

"I fear for many producers who cannot stand the pressure that we are all facing. Some will inevitably leave the industry as a result of these cuts.

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"British agriculture is bleeding and drastic action needs to be taken from the top."

Lyndsay Chapman, agriculture director of Muller Milk & Ingredients, said: "Market returns continue to be severely depressed creating an increasingly difficult trading environment as we approach the peak period of milk production. As a result we unfortunately have to reflect this through a further reduction to our milk prices for May.

"Milk price reflects the balance of supply and demand and all of us in the dairy sector desperately need a significant improvement in this balance to generate better returns.

"Regardless of the overall market environment, we will maintain our commitment to a competitive and clear farm gate milk price and contract proposition for the dairy farmers who supply us, ensuring that the headline price which we offer correlates to the returns which dairy farmers can expect.

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"We are also committed to the principles of the voluntary code, so will always seek to provide 30 days' notice of price adjustments."

Campaign group Farmers For Action, which organised last week's march, has revealed it is planning a second one in the capital on June 22 to raise further awareness of the issues affecting farmers.

Chairman David Handley said dairy and pig farmers are probably experiencing the worst prices paid in decades, and also fears many will leave the industry if current prices continue to fall.