New price cut for dairy farmers

DAIRY FARMERS supplying milk to Leeds-based Arla are facing another cut to the price they receive for milk in what the farming union described as “another devastating blow”.

Arla insisted it was doing everything it could to alleviate the pressures on its farmer members, despite announcing another month of price cuts.

The milk processing firm has announced that its Arla Foods amba on-account price will reduce by one eurocent per kg, with effect from next Monday.

With the strength of the pound continuing to strengthen and July seeing a new quarter’s average exchange rate being introduced to the pricing mechanism, Arla’s UK standard litre price will drop by 1.18 pence per litre - down to 23.81ppl.

Sign up to our daily newsletter

The i newsletter cut through the noise

Ash Amirahmadi, head of UK milk and member services, said: “Commodity markets are continuing their downward trend, despite only a minor reduction in prices in the latest Global Dairy Trade auction. While we have taken significant mitigating actions, the impact has been felt on our traded business and more recently on European markets which are also in decline.”

Rob Harrison, the National Farmers’ Union’s dairy board chairman, said: “This is yet another body blow to dairy farmers whose businesses have been in utter turmoil for the past 12 months, with 450 quitting dairy farming since this time last year in England and Wales. The recent series of cuts have highlighted the need for short-term solutions to address the problems happening now – farmers need urgent help from industry and Government.

“We need Government to move away from paying lip service and focus on the here and now. Their long-term solutions must take a back seat while we focus on the immediate crisis; we need them to insist on best practice in the supply chain, look at growing dairy consumption and supporting more investment in dairy processing in the UK – and this needs to happen now.

“We also urgently need milk-buyers to be more transparent in pricing. Although there are a few clear formulas employed by milk processors, these are few and far between. We need all processors to improve transparency in pricing and must stop idly following one another to the bottom; this is a dire situation and we need to see the dairy industry pull through this period of volatility. Government has a role here in insisting processors provide up-to-date market and production data so that the whole supply chain can better understand what’s happening and how to manage risk in the future.”