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Evidence has shown that farm gate milk prices have often been significantly variable and vary considerably between farmer-household milk producers. Dairy farmers have been unaware of milk prices received by other farmers due to the weak physical and commercial infrastructure and asymmetric information flow. This study aimed to determine the factors that affect farm gate milk price variability among dairy farmer households in Kericho County, Kenya. A multistage cluster sampling technique was used to collect data from 432 dairy farmer households selling raw milk to different milk marketing channels. Both primary and secondary data were collected and used in the study. Multivariate probit and selectivity-biased mixed-effects linear regression models were used to estimate the survey data. The study results showed that an increased daily milk output sold and the number of commercial milk buyers resulted in an increased probability of farm gate milk price variability by 3.8% and 12%, respectively. However, the number of milking cows and trust levels of commercial milk buyers by the seller decreased the farm gate milk price heterogeneity by 89% and 87%, respectively. Selling through commercial milk marketing channels significantly positively affected farm gate milk prices. However, most dairy farmer households hesitated to engage with them since the commercial milk buyers valued their supply security, which came from trusted relationships and contracts. Therefore, critical strategies to improve farm gate milk prices are needed. These include strengthening the dairy farmer groups and partnership development, bolstering milk cooperative societies and increasing the financial investments in livestock milk markets by the national and county governments in Kenya.