Dairy co-op Arla has cut its milk price for the second month running, leaving recovery hopes far in the distance.
From 1 May the co-op’s 2,700 British members will be paid 20.12p/litre — 0.75p/litre lower than April’s rate. This follows a 1p/litre drop four weeks ago.
Arla’s May price is more than 5p/litre lower than the same month in 2015.
Farmers supplying Arla on direct contracts, as non-members, will also suffer.
Their price will drop 0.9p/litre to 15.1p/litre from 1 June.
In March, 40-50 of those producers were handed 12 months’ notice on their contracts.
Arla’s statement blamed the ongoing imbalance between global supply and demand, along with high cheese stocks and a “very competitive market environment”.
The entire world market is at an unsustainably low level right now Johnnie Russell, Arla farmer board director
“The continuing decline of milk price is of deep concern to all involved in the dairy industry,” said Arla farmer board director Johnnie Russell.
“The entire world market is at an unsustainably low level right now.”
Mr Russell said that Arla was doing all it could to mitigate the market downturn, moving milk into branded sales and food service. But even those areas were now struggling.
This week, world dairy markets showed a glimmer of positivity, along with a reminder of how deeply the trade has collapsed.
The average price on the benchmark Global Dairy Trade auction rose 3.8% on the week, after another small rise in the previous fortnightly sale.
But prices were still down 13% on the year and 55% on the all-time high in early 2014.