Strengthening world markets have led the Royal Association of British Dairy Farmers (RABDF) to call for processors to pass improved returns down the supply chain to enable farmgate investment and ensure a future supply base.

RABDF chairman David Cotton said: "Optimism in the world marketplace is currently high. Farmers are aware that EU commodity prices are on the increase and they are expecting to see improved returns over the summer.

"Processors have been posting some healthy profits in the last couple of weeks, but those trends are not yet apparent at the farmgate.

"If producer prices don't improve soon, some major questions will be asked over whether processors actually want to retain the suppliers that remain."