Arla UK cuts milk price for third consecutive month

Arla Foods has cuts its UK milk price for August by 1c/kg – 0.8p when applied to the UK standard litre – for the third consecutive month.

The price cut will come into effect from August 3 bringing the price of a standard litre to 23.01p, it says.

This latest cut to UK farmers comes after a drop in June and July of 1c/kg each month.

Ash Amirahmadi, Head of UK Milk and Member Services, said that the downward price trend is continuing across markets globally, with the latest Global Dairy Trade auction down significantly by 10.7%.

“This has put further considerable pressure on the markets. The situation is not helped by high milk production throughout the world, while demand from China and Russia, in particular, continues to be low.

“These global developments are impacting all dairy markets throughout the world,” he said.

Amirahmadi said that while Arla UK is doing everything it can to further reduce its costs, grow its branded portfolio, launch the Arla brand into dairy, promote its farmer-owned status, and work independently with each of its customers to find solutions to deal with market volatility, it simply cannot influence the macro factors.

Jonathan Ovens, Arla Foods Farmer Board Director, said that as a farmer-owned business, with 3,000 British dairy farmer owners, it are painfully aware of the impact that the downturn in the markets is having at farm level and this cannot be ignored.

“It’s not a lack of effort or determination on Arla’s part; we are doing everything possible to help our owners to navigate through this increasingly tough situation, in the best possible way,” he said.

The milk price, for the small number of Arla farmers on a direct supply contract, will reduce by 0.85p/L from September 1, 2015, it says.

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