Arla cuts milk price to farmers at the end of tough year

The average UK dairy farmer has faced falling income from milk since February.
The average UK dairy farmer has faced falling income from milk since February.
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Three thousand dairy farmers have been handed “the worst possible Christmas present” after Arla revealed its farmers will receive a 2.03 pence per litre (ppl) drop in the price they receive for their milk.

Arla members will get 24.81ppl from January 5, as the global supply of milk continues to outstrip demand. Average UK farmgate prices for milk have dropped each month since February and new Arla price is almost 10ppl less than the UK average price 12 months earlier - 33.84ppl in January this year.

Meurig Raymond, president of the National Farmers’ Union (NFU), said: “I feel desperate for those 3,000 dairy farmers supplying Arla who’ve been delivered the worst possible Christmas present. It couldn’t have come at a worse time and this latest reduction will continue to place huge pressure on cash flows for these farmers in the months ahead. It is vital that we don’t see this trend continue through other processors’ February price announcements.

“For the first time producer numbers have dipped under 10,000 with 60 going out of business in November alone. We will continue to put pressure on government, retailers and the processors with the aim of trying to rebuild an economically sustainable dairy industry. We cannot emphasise enough how awful this downward spiral has been for the dairy industry in the UK.”

Ash Amirahmadi, Arla’s UK head of milk and member services, said: “Global supply and demand are still out of balance which is continuing to create downward pressure. The knock on impact of weak international prices on the European markets has affected Arla’s business performance, as well as that of the entire dairy industry in Europe.”

And the milk price was still prone to a downward trend, he said: “The weak, but positive result of the recent Global Dairy Trade auction is welcome, however it is too early to conclude that there is any change in underlying market conditions.”

NFU dairy board chairman Rob Harrison said dairy farmers will continue to provide the nation’s milk. “All we ask is that the public continues to buy British dairy products over the festive period, including British cheese, look out for the Red Tractor logo and continue to back British farming.”