Arla Foods amba is to reduce its global farmgate milk price for co-operative members to €1.50 per kg.
The reduction takes effect on 7 July, and when applied through Arla’s pricing mechanism, results in a reduction of 1.23ppl on Arla’s UK standard litre price.
This reduction, coupled with a slight increase in Arla’s forecast supplementary payment for members of 0.04ppl, takes the co-operative’s UK standard litre price to 32.52ppl.
Arla had previously reduced its farmgate price with its standard three days’ notice on 25 April by 1.27ppl to 33.74ppl. It is also reducing the price paid to its direct pool of milk farmers who are not owners of the co-operative and not aligned to by 1.5ppl to 32ppl, from 1 July.
“In previous months, Arla Foods amba has reported challenging global market conditions for dairy products and, generally speaking, this remains the case,” said Arla Foods UK head of milk and member services Ash Amirahmadi.
The reduction “wasn’t good news for farmers” said the NFU’s chief dairy adviser Rob Newbery, but as Arla’s price was directly linked to market performance “it wasn’t a massive surprise”.
“The question is how the competition will react to the reduction. I would not expect the other companies, who claim to offer farmers less volatility on prices, to drop their prices as much.
Source: The Grocer
