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Farmers have warned they could form blockades again on Friday night
The Co-op has announced it is to increase the premium it pays on milk to farmers within its group, following protests over the prices some supermarkets pay suppliers.
The company said it wanted to recognise the importance of "ensuring sustainable future" for British dairy farmers.
Hundreds of farmers have been protesting at cuts of up to 2p a litre by blockading milk processing plants.
The National Farmers' Union described the Co-op's move as a "positive step".
Farmers for Action (FFA) is warning that hundreds of dairy farmers could be forced out of business by price cuts - as well as rising feed costs - which would lead to milk being imported in large quantities.
It says some supermarkets pay a fair price directly to farmers for liquid milk.
But it warns that farmers are making a loss of up to 3p a litre on milk used in dairy products - such as cheese, milk and butter - sold by some of those same supermarkets.
The Co-operative Dairy Group (CDG) said the premium farmers would receive will rise to 2.57p a litre with immediate effect and to 4.27p a litre from 1 August. It brings the total price they receive to 29p per litre.
Steve Murrells, chief executive of the Co-operative Food, said: "We have been in continual discussions on this issue with the National Farmers' Union and we have listened to their concerns.
"We are taking this action to help alleviate the immediate pressures that farmers within the CDG are facing. Going forward, we are committed to finding a supply model that is sustainable for the long-term future of our dairy farmers."
Peter Kendall, president of the National Farmers' Union, said: "Their recognition of the real difficulties being faced by British farmers this summer and commitment to support them through these difficult times is to be applauded. But whilst this is an important move, all retailers must move to a sustainable funding model for the dairy industry."
