Milk processing giant Arla has announced a cut in the price it will pay farmers for milk in June.
After increasing its milk price by 1.5 eurocent per kg in April and maintaining the price into May, the Arla Foods amba on account price will reduce by one eurocent per kg with effect from May 25.
When applied to the UK standard litre, the impact will be a reduction of 0.84 pence taking it to 24.99 pence.
More than 250 Yorkshire dairy farmers supply milk to Arla.
Ash Amirahmadi, Arla UK’s head of milk and member services, said: “Following a brief market upturn, which we were able to reflect in our milk price, the commodity markets continue their negative trend. Whilst we continue to do everything possible to minimise the impact, unfortunately, we have not been able to buck the market. The entire global dairy industry has been affected by these market forces.”
Reacting to the price cut, the National Farmers’ Union’s dairy board chairman Rob Harrison said: “Arla’s announcement is yet another major setback when UK milk prices are already at unsustainably low levels with many of our dairy farmers in dire financial difficulties, struggling to see a way through the next few months.
“I cannot emphasise how important it is that other processors base the price they pay their farmers on their own product mix and continue to search for maximum value throughout the supply chain, rather than idly following one another to the bottom.
“Global markets, which rallied in January and February, have fallen back again, with this week’s global trade auction falling by 2.2 per cent, leaving commodity markets in the worst position we have seen in years.
“We have passed the UK spring flush peak and spot prices have improved slightly but there is little respite on the horizon for the dairy sector and it is going to be intensely painful for a lot of dairy producers in the short term.
“Despite the bleak outlook, thankfully we still have the support of the British public. I’d urge them to keep on buying British dairy products, including cheese, butter and yogurt and look out for the Red Tractor logo. Farmers appreciate all the support from shoppers who continue to back British farming.”