Arla cuts milk price amid warnings of tough months ahead

Arla insisted it was doing everything it could to alleviate the pressures on its farmer members, despite announcing another month of price cuts.
Arla insisted it was doing everything it could to alleviate the pressures on its farmer members, despite announcing another month of price cuts.
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DAIRY farmers can expect the rest of the year to be “extremely difficult” with the forecast for farm gate milk prices still no better, the farmers’ union said.

It comes as the UK’s biggest milk co-operative Arla, which is supplied with milk from more than 250 dairy farmers in Yorkshire, announced that it was cutting its milk price to its UK members by 0.80 pence per litre (ppl).

The fresh price cut will see Arla members paid 23.01 ppl from Monday, August 3.

Ash Amirahmadi, head of UK milk and member services, said: “The downward price trend is continuing across markets globally, with the latest GDT (Global Dairy Trade) auction down significantly by 10.7 per cent and this has put further considerable pressure on the markets.

“The situation is not helped by high milk production throughout the world, while demand from China and Russia, in particular, continues to be low.

“While we are doing everything we can to further reduce our costs, grow our branded portfolio, launch the Arla brand into dairy, promote our farmer-owned status, and work independently with each of our customers to find solutions to deal with market volatility, we simply cannot influence the macro factors.”

According to the latest figures published by the Department for Environment, Food and Rural Affairs, the average farm gate milk price was 24.06ppl in May - 8.18ppl less than the same time a year earlier.

Rob Harrison, dairy board chairman at the National Farmers’ Union, said: “Dairy farmers across the UK are struggling right now and it’s not getting any easier. The market outlook for the rest of this year and into 2016 is not positive so we’re in for an extremely difficult autumn and winter.

“We know this isn’t a UK problem alone - dairy farmers across the world are suffering from milk prices far below the cost of production - we’ve seen protests in France and milk being thrown away in Canada and the US.”

He said he met Farming Minister George Eustice last week to reiterate how bad the situation was.

“We desperately need the Government’s help to ensure a fully functioning and fair dairy supply chain. Now is the time for action - just this week we’ve seen the French Government provide a list of support measures and financial backing to help their farmers through this difficult period.

“We also continue to meet with the major retailers, banks, food service companies and processors to urge for a fair, sustainable and transparent supply chain. There’s so much more that can be done to promote high quality, traceable UK dairy products to help drive consumption.”