Retailers, milk processors and co-ops need to pass milk price increases to farmers, according to National Farmers Union (NFU) Scotland.

The union is calling for "an immediate and sustained milk price increase" as part of the current round of re-tendering for contracts.

Wholesale prices for products such as cheddar, butter, cream, and milk powder are now substantially above last year's prices, but farmgate prices have not moved in the same way.

"The market place in the UK is clearly malfunctioning as the huge hike in wholesale prices for cream, powder, butter and cheese have failed to produce any real benefit at our farm level while in other countries around Europe milk prices are jumping," said the union's milk committee chairman Jimmy Mitchell.

"There is undeniably sufficient profitability in the marketplace for all retailers and milk purchasers to deliver a meaningful uplift in milk prices to farmers from July through to August and September," he added.

Mitchell said the union had also asked DairyCo to investigate the impact that competitive middle ground market – which coves local shops and garages - has on farmgate prices.

"Farmers are in the process of organising themselves for the winter ahead, planning their feed purchases and buying in fertiliser and fuel.  They need the confidence to know that the price they will be receiving in the autumn will justify that level of planning and expenditure," he added.