Bega cuts farmgate milk price

Bega Cheese will pay dairy farmers less for their milk in 2016/17 than the company did in the prior year.

Bega Cheese has cut the price it will offer dairy farmers for their milk in 2016/17 by about 11%. (AAP)

Bega Cheese has followed its rivals by cutting the price it will offer dairy farmers for their milk.

Bega has trimmed its 2016/17 farmgate price from $5.60 to $5.00 per kilogram of milk solids, a cut of about 11 per cent that brings it into line with Fonterra and Murray Goulburn.

Global dairy prices have been hit by significant growth in supply, Russian sanctions on dairy imports, slowing demand in demand from China and highly competitive markets.

"These are difficult times in terms of farmgate milk prices," Bega executive chairman Barry Irvin said on Tuesday.

"We believe our opening 2016/17 prices appropriately reflect the market and are responsible."

In April, Murray Goulburn cut its farmgate milk price for the rest of 2015/16 from $5.60 per kilogram of milk solids to between $4.75 and $5.00.

Then in early May, Fonterra Australia cut its farmgate milk price to $5.00 from $5.60 for the current season.

Both Murray Goulburn and Fonterra said the cuts to the farmgate price for the rest of 2015/16 reflected low global dairy commodity prices and the strength of the Australian dollar.

Shares in Bega Cheese were up 13 cents, or 2.28 per cent, at $5.84 by 1508 AEST.