Arla UK to hold its May milk price

Arla Foods is to hold its UK milk price into May 2015, the co-operative has announced.

The company is raising the UK standard litre by 0.03p/L to 25.83p/L following on from confirmation of the exchange rate used in the currency smoothing mechanism to convert milk price for this quarter.

It also says this increase has been backdated to April 1, 2015.

Ash Amirahmadi, Arla Foods UK Head of Milk and Member Services, said that commodity markets continue to show their recent negative trend and trading conditions are difficult.

“We maintain our focus on maximising the returns for our members at a challenging time,” he said.

Recently, the company said 2014 was a complex year for Arla. It said that the farmer-owned company achieved one of its best results ever in a market impacted by volatility and international politics.

A strong first half of the year produced record-high earnings, but the global market shifted in the second half, reducing the farmer milk price significantly, it said.

CEO of Arla, Peter Tuborgh, said seldom has a business year been split in two so opposing halves.

“2014 was a year that first saw strong economic tail winds in the global market that carried Arla into the summer with record-high milk prices for its cooperative farmers in Sweden, Denmark, Germany, the UK, Belgium, Luxembourg and the Netherlands.

“Then things changed. The tail winds became head winds as global supplies rapidly outstripped demand, Chinese consumption ebbed off, and inventories were full. Finally, when Russia imposed a ban on dairy products from the EU, the headwinds grew in strength,” he said.