Arla, Yorkshire dairy farmers’ biggest customer, has today announced that it is set to increase its farm gate milk price for the second successive month.
The processor is raising its milk price to owners by two eurocents per kilogramme from October 1. This follows an increase in the September price.
Commodity markets, as well as yellow cheese markets in Europe, are continuing to strengthen, and prices across European retail markets also continue to firm.Johnnie Russell, Arla Foods amba board director
In a statement Arla said there is also a positive currency impact as a result of the new quarter’s average exchange rate being introduced to the pricing mechanism.
When the increase to the on-account price, and currency impact, are applied to the UK standard litre, the increase amount to 1.6 pence, taking the conventional milk price to 21.65 pence per litre.
It is a welcome price rise from what is a low base price after months of struggling prices due to a global oversupply of milk.
Johnnie Russell, Arla Foods amba board director, said: “While the price is still not adequate, the one pence increase in September, coupled with the 1.6 pence increase in October, is good news for our farmer owners and demonstrates the strength of our business model which allows us to increase the returns to our farmer owners in line with our formulaic pricing mechanism.
“Commodity markets, as well as yellow cheese markets in Europe, are continuing to strengthen, and prices across European retail markets also continue to firm. Milk production in the EU continues to slow down, and we expect this trend to carry on over the coming months.”