There is a danger that Europe could be facing a shortage of milk, cream and butter this Christmas, according to the CEO of one of the world’s biggest dairy companies.
Milk prices are set to rise in the face of this potential shortage, Peder Tuborgh, the CEO of Danish-based dairy co-operative Arla Foods, told Reuters recently.
With global milk prices having stabilised in recent months, Tuborgh explained that world milk stocks were very low.
There has been a scarcity of milk in the whole world after the very low prices last year.
“There is a big lack of fat, cream and butter products everywhere in Europe. It will not at all be possible to meet demand up to Christmas. It is those forces that are dragging up the prices significantly,” he said.
Milk prices across Europe improved throughout 2017, following a sharp decline last year in light of the abolition of EU milk quotas in 2015.
On Friday, August 25, Arla announced a third consecutive milk price increase for the month of September – upping its price by 1c/kg to 38.3c/kg.
Arla, which is a co-operative that is owned by approximately 12,500 farmers in Denmark, Sweden, Germany, the UK, Luxembourg, the Netherlands and Belgium also revealed that another price increase could be on the cards by the end of the year.
After that we might increase it one more time this year, but that is a bit uncertain.
In the first half of this year, Arla revealed that its revenue was up by 3% – while the price its farmer-owners received jumped by 19%.
The co-op expects to achieve its full-year targets for profits, strategic branded growth and financial leverage – along with further improvements in the performance price, as well as a full-year group revenue increase of nearly €1 billion.
“I think we’ve already had the main part of the price increases we’ll see this year,” the CEO of Arla told Reuters. Tuborgh also predicted that milk production would catch up next year and grow by between 2% and 3%.