Arla milk price protest© Tim Scrivener

Farmers have threatened to shut down one of Britain’s biggest dairy processors if farmgate milk prices fall further.

David Handley, chairman of Farmers For Action (FFA), said Arla Foods had been told it would be shut down “within a fortnight” if there was a further price cut.

Arla is due to announce its milk price for February at the end of this month.

See also: FFA chief David Handley threatens to quit dairy farming

Some 400 farmers attended a dairy crisis meeting, hosted by FFA, at Bakewell livestock market in Derbyshire on Thursday (15 January).

Mr Handley said dairy producers would take to the streets again if there were further cuts in milk prices.

“British dairy farming is in crisis and we’ve got to stop it,” Mr Handley told farmers. “We cannot carry on the way we are.”

Farmgate milk prices have fallen by one-third in recent months – from more than 30p/litre a year ago to closer to 20p/litre now.

There are fears that further price cuts could be on the way – with mounting concern over the surge in milk production when cows calve and return to grass this spring.

Asked whether they were willing to protest if there was another cut in milk prices, about one in four producers at the Bakewell meeting raised their hands.

Listen to: David Handley talks about the protest threat

Speaking to Farmers Weekly afterwards, Mr Handley said: “It is up to dairy farmers, as with the show of hands tonight, to show they are prepared to keep fighting to save their industry.”

He added: “We are getting inundated with calls – from as far away as Scotland – that if Arla make another price cut, they certainly should have the attention of Farmers For Action.”

About 3,000 UK dairy producers supply farmer-owned Arla. The business has a yearly combined milk pool of about 3.2bn litres and an annual turnover of £2bn.

Arla Foods UK supplies major retailers with fresh milk and a range of dairy products, including Cravendale, Anchor and Lurpak.

Wiltshire dairy farmer Jonathan Ovens, who is chairman of the Arla Milk Co-operative (AMCo), told the meeting that the company would start deciding its February milk price next week.

“It is a fairly simple process,” he said. “We look at what we are selling the milk for, we then do the calculation as to how many litres, and we then arrive at the price which we can pay for that milk going forward in February.”

There was one price for every Arla farmer across Europe, said Mr Ovens. And in an apparent dig at First Milk, he said the company would never pay farmers more for milk than it could afford to pay.

“I am one of 16 farmers throughout Europe who make that decision towards the end of the month on the pricing for the next month.

“We will never pay out more than the business can afford.”

Although milk prices have fallen sharply over recent months, Mr Ovens suggested there was a “glimmer of light” for the future.

Butter had been performing particularly strongly and there is a drought in New Zealand, which meant New Zealanders would go into the end of their season with less product to sell.