Arla issues fourth milk price cut in five months

Arla has cut its milk price by 1.2p/litre, blaming the Russian import ban and still weak dairy commodity markets.

Co-op members will be paid 30.38p/litre from September after the fourth drop in five months.

Arla’s member price is now 4.63p/litre lower than it was in February.

The farmer-owned business has been hit particularly by Russia’s decision to ban Western food imports, as Russian exports account for about 1.3% of its global sales.

It had to cut 79 jobs in Denmark as it was forced to stop production of butter and cheese for the Russian market.

On Tuesday, the average prices on Fonterra’s Global Dairy Trade auction steadied slightly with a 0.6% fall, but remain about 40% lower than in February.

Arla head of milk and member services Ash Amirahmadi said: “This further reduction in Arla’s global milk price is necessary due to a continued downward movement in global and European prices, made worse by the Russian ban.”

See also: Arla drops milk price from August