When the 15% rise comes into force on Monday, a 500ml carton will increase from 65p to 75p, while a litre will rise by 20p to £1.35.
It follows an 8% hike implemented in April.
Managing Director Findlay Macleod said the cost of producing milk had risen by 60% so far this year.
Most of the island’s local milk is processed by the creamery, which operates as a cooperative.
Retail prices for milk on the island are set by the Milk Marketing Committee, which is chaired by the Minister for Environment, Food and Agriculture and includes representatives from the Office of Fair Trading and the National Farmers’ Union.
Mr Macleod said world events had “greatly impacted the costs we are facing in both the farming and manufacturing and processing elements of our business”.
The cost of fertilizer, fuel and animal feed have all risen, and the cooperative “needs to pay the farmers more for each litre of milk they produce in order for them to keep their businesses and the industry operating”, he said.
Mr Macleod said increasing the retail price would “help all local milk suppliers and the wider dairy industry navigate these extremely trying times”.