Dairy processing firm Arla Foods has pledged almost £40 million of investment across its UK sites this year, despite ailing returns for its farmers’ milk.
The company, which is supplied by more than 250 farmers in Yorkshire and 3,000 in total across Britain, said the investment meant it would be launching new product ranges.
Last year Arla opened a state-of-the art dairy at Aylesbury and invested in new technology across several sites, including new packing facilities for Anchor Cheddar and own label cheese at its facility in Oswestry, Shropshire.
Peter Giørtz-Carlsen, Arla Foods UK’s executive vice-president, said: “The UK business has delivered in a very challenging market and we have embedded some of the measures needed for sustainable growth in the long-term. We are acutely aware of the continuing challenge, but it is vital we remain firm in our approach to build an organisation that is competitive today and into the future.”
The company achieved one of its best ever results in 2014 in a market impacted by “volatility and international politics”, but prices paid to its ‘on-account’ farmers fell to 24.87 pence per litre (ppl) this month.
Latest DairyCo data shows the average farm gate milk price as 27.85ppl for December, but that price is now likely to be lower.
Forty-five farms supply milk to Wensleydale Creamery in Hawes and Kirkby Malzeard near Ripon for processing into the Creamery’s renowned brands of cheese, and they currently receive 25.5ppl.
Sandra Bell, the Creamery’s marketing manager, said: “We look at what other manufacturers are paying for milk and we aim to pay a fair price. We have to follow the market but we’re trying to keep it as competitive as we can.”
Most of its suppliers are based within a 17-mile radius of its site in Hawes but that could change if dairy farm numbers continue to fall. Ms Bell said: “We don’t want that to happen but if it did we would have to look further afield - but we only recruit farms with the right quality for making our cheese.”