Arla to cut its milk price by 1.5c/kg

Arla Foods is reducing 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 32.52p pence.

Commenting on the reduction, Ash Amirahmadi, Arla Foods UK’s head of milk and member services, said: “In previous months, Arla Foods amba has reported challenging global market conditions for dairy products and, generally speaking, this remains the case.”

It comes after Arla cut its June milk price  in the UK by 1.27p/L taking it to 33.74p/L. That move was followed by the Müller UK & Ireland Group, which cut its milk price to 32.00p/L price from June.

It comes in the wake of Arla opening the world’s largest liquid milk plant in the UK. The plant has the capacity to produce 1.5 million bottles of milk a day, or 240,000 litres of milk a day, which will be supplied by some 900 dairy farmers. At full capacity the plant’s 16 silos can hold 4.8 million litres of milk, has six processing sections which can process 240,000 litres per hour and has 150 lorries on the road supplying milk to it every day.