The Irish Farmers' Association (IFA) has hit out at Glanbia over its decision to cut milk prices again in September despite signs of a pick-up in the global dairy market.

The Kilkenny-based processor, the State’s largest, cut its September milk price to 24 cent a litre, its lowest level in five years, citing what it called “challenging” market conditions.

The move comes after rival processors Kerry and Lakeland held their September prices unchanged.

Irish dairy farmers have been hammered by a collapse in milk prices over the past year linked to a slowdown in China and the Russian trade embargo.

However, industry bodies cite a recent sequence of price rises in the Global Dairy Trade (GDT) auction as evidence the market may be bottoming out.

IFA president Eddie Downey said Glanbia's decision would leave its suppliers "bitterly disappointed" and raised questions about the company's pricing model .

“At a time when a market recovery is underway, this decision is a serious confidence blow to Glanbia suppliers facing into an expensive winter,” Mr Downey said.

“Farmers are under tremendous cash flow pressure, and needed to see their price at least maintained, and both Lakeland and Kerry must be commended on holding their September milk price. All other processors must follow their lead and maintain prices,” he added.

Glanbia said September’s price cut reflects market returns at a challenging time for global dairy prices.

“Milk price is best judged on a full-year basis rather than for one month,” the company said, noting it was ranked fourth in the Irish Farmers Journal- KPMG milk price review for 2014 and would be well placed for 2015 relative to peers.

Glanbia also noted its members receive considerable support from the co-op and have benefitted from “value creation” in the plc.