Open Country Dairy has lifted the monthly payment to its 500 milk suppliers.
The second biggest dairy processor in the country has increased the advance payment to $3.05 per kg of milk solids, up from $2.90.
Chief executive Mark Fankhauser says Open Country hopes to keep the higher payment going until February, when Fonterra is due to lift its advance.
Fonterra is currently paying its 11,000 suppliers $2.90 per kg, which is more than $1 per kg lower than last season's advance.
It's forecasting a final milk price of $4.55 per kg, but farmers don't get the full payout until after the season is finished.
