Arla UK holds milk price despite market pressure

Despite ongoing downward pressure on dairy markets, Arla Foods is to hold its on-account milk price for March 2016.

Arla is holding its price at 21.81p/L (27.62c/L) for its 2,700 owners in the UK.

Commenting on the situation, Ash Amirahmadi, Head of Milk and Member Services at Arla Foods UK, said the ongoing imbalance between conventional milk supply and demand is putting continued pressure on the on-farm economy.

He said this is while the significant increase in production across northern Europe is resulting in higher cheese and ingredients stocks, resulting in sustained downward pressure on the markets.

“The GDT auction has also mirrored this with a downward trend.”

In contrast, the market for organic products, mainly in Europe, remains strong and organic milk continues to be in demand.

Earlier this month Arla posted its 2015 results, where it said that global dairy markets are expected to remain unpredictable and tough in 2016, but a turn for the better is anticipated towards the end of 2016.

The dairy giant said that the global dairy markets have rarely been as tough and unpredictable, and 2015 has unfortunately been as challenging as anticipated.

Arla CEO Peder Tuborgh said that it has an extremely difficult task ahead of them in 2016 as global milk supply still exceeds demand.

“We do expect that the global market will begin to turn for the better towards the end of 2016.”

Arla finished 2015 with €10.3 billion in revenue, a 3.3% decline compared to the year before.