Golden Vale, one of the country's largest milk processors, last night followed its main competitors in cutting the price it pays for milk to £1 a gallon. The company said it was making the reduction, amounting to eight pence, because of poor market - returns for dairy products and the recent revaluations of the Green Pound.

"The company fully understands the impact of lower milk prices on farm incomes and will use its best efforts in support of Government and EU compensations schemes," Golden Vale said in a statement.

Earlier in the week, similar decisions by Dairygold, Avonmore and Kerry provoked a storm of protest from farming organisations.