UK dairy processors increase price on the back of ‘falling milk production’

A number of dairy processors in the UK have moved to increase September’s milk price, with prices up by 0.75-1p/L (0.88-1.17c/L).

The move by processors follows a fall in milk production in the UK and some strengthen in the dairy markets over the past few months.

The Head of Procurement with Dairy Crest in the UK, Ruth Askew said the processor will increase its September milk price by 1p/L (1.17c/L).

“We are increasing our milk price against a backdrop of falling UK milk production. Dairy Crest wanted to reflect this in our milk price as soon as possible,” she said.

Another UK-based dairy processor, Arla UK, has also announced that it will increase the milk price for September supplies of milk by 1.01p/kg (1.25c/kg).

Commenting on the decision, Arla Foods amba board director, Jonathan Ovens, said that this is welcome news for Arla’s farmer owners who continue to face challenging times on farm.

Our increase will hopefully reaffirm their confidence in the dairy industry, after 18 months of falling prices.

Owens said that the milk price increase follows a significant downturn in milk production and increases in yellow cheese prices across Europe, while prices across European retail markets are also firming.

Along with Arla UK and Dairy Crest, UK dairy processor First Milk has also announced that it will be increasing its milk price by 0.75p/L (0.88c/L).

The processor’s Chairman, Clive Sharpe said that the September increase could rise further.

Meadow Foods has also announced that it will be increasing its September milk price by 1p/L (1.17c/L). This is the third consecutive price increase from the processor.

Speaking following the announcement, the Executive Chairman, Simon Chantler said he appreciated that these increases do not yet return producers to sustainable prices.

“We hope the current positivity in the market continues and that we are able to continue to return any improvements as quickly as possible to our producers,” he said.