Arla cuts UK milk price by €1.25/kg

Arla Foods is cutting its owner on-account price by €1.25 cents per kg, with effect from August 4, 2014.

When applied through the pricing mechanism, this reduction equates to an overall £0.94 pence reduction in Arla’s UK standard litre price, taking the standard litre to 31.58ppL. The adjustment is made up of a decrease of 0.98ppl in the on-account price and a 0.04ppl increase in the 13th payment.

Commenting on the reduction, Ash Amirahmadi, Arla UK’s head of milk and member services said:  “This milk price reduction is necessary due to a further downward movement in global and European prices, which are affecting the entire industry.”

The moves comes after a number of price cuts from Arla. In June it reduced its global on-account milk price by €1.5 cents per kg, with effect from July 7, 2014, which, when applied through the pricing mechanism, results in a reduction of 1.23ppl on Arla’s UK standard litre.

The reduction in the standard litre price, coupled with a slight increase in the forecast supplementary payment, of 0.04ppl, takes Arla’s UK standard litre price to 32.52ppL.

At the time it reported challenging global market conditions as the reason for the cut. In April it cut its UK milk price by 1.27ppL from 35.01ppL.

One-in-four dairy farmers in the UK supply Arla. Meanwhile Dairy Crest also cut its milk price to UK farmers recently.

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