The milk price paid to Arla Foods UK members will be cut by 1.67ppl, according to a statement released by the company this week.

Commenting on the reduction, Ash Amirahmadi, Arla UK’s head of milk and member services said: “Globally, milk production has increased by circa four to 5%, which is out of sync with a lower increase in global demand of circa one to 2%.  This imbalance is resulting in large stocks and, as a consequence, markets have dropped sharply.

“Furthermore, Chinese demand continues to be sluggish and the Russian import ban is continuing to have an impact on European industry prices. This negative pressure is having a significant effect on Arla’s milk price.”

In addition, Arla’s quarterly reforecast has led to a fall in its forecasted supplementary (13th) payment, with the co-operative currently anticipating this to be 0.65ppl for 2014. The decrease is due a fall in turnover as a result of reduced commodity selling prices, although the final figure will be confirmed in February 2015