Dairy firm Robert Wiseman has reported a 3.5% drop in pre-tax profits to £20.2m for the six months to 2 October.
The company blamed rising costs and increased competition from rivals for the fall.
Wiseman said a number of major contracts had been renegotiated and intense competition had "reduced selling prices".
The East Kilbride based group processes and delivers more than 30% of the fresh milk consumed in Britain every day.
Wiseman, which warned over full-year profits in September, said it would step up its fight in the milk price wars.
In a statement the company said: "This intense competition has not abated, but we remain committed to maintaining our existing volumes."
The group has been hit by rising costs across its operations.
The price of the raw material used in plastic milk cartons increased by 24% compared with a year ago while fuel costs rose by 16% over the 12 month period.
Wiseman said it would tackle the squeeze on its margins "through the ongoing reduction in costs along with steps to maximise efficiencies across the business."
The company recently increased the capacity of its Bridgwater dairy in Somerset to 500 million litres a year and has opened a new depot at Amesbury in Wiltshire.
The group has six other major processing dairies in Aberdeen, East Kilbride, Glasgow, Manchester, Droitwich Spa, and Okehampton.
Billy Keane, managing director of Robert Wiseman, said the group was well placed to weather the current difficulties.
He added: "We have the best dairy and distribution network in the industry, headroom to accommodate future volume growth, a robust balance sheet, low debt and intend to maintain dividend payments in line with last year."