Close-up of Arla tanker

Arla Foods amba members face a further 0.8p/litre price cut from 3 August.

This will cut the standard litre price for the milk co-op’s 3,000 British members to 23.01p/litre. The fall follows another downturn in global dairy markets with the latest GDT online dairy commodity auction slumping to a new six-year low last week.

The August price cut comes on top of a 1.18p/litre drop for Arla members this month and a 0.84p/litre cut in June.

“The downward price trend is continuing across markets globally, with the latest GDT auction down significantly by 10.7%,” said Ash Amirahmadi, head of UK milk and member services at the co-op.

See also: World dairy price plunge adds to farmer fears

“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.  These global developments are affecting all dairy markets throughout the world. 

“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.”

Arla Foods amba farmer board director Jonathan Ovens added: “As a farmer-owned business, with 3,000 British dairy farmer owners, we are painfully aware of the effect the downturn in the markets is having at farm level and this cannot be ignored.

“We are doing everything possible to help our owners to navigate through this increasingly tough situation, in the best possible way.”

The milk price for Arla farmers on a direct supply contract will reduce by 0.85p/litre from 1 September 2015 to 20.15p/litre.