Arla cuts milk price

ARLA FOODS UK has cut its June milk price by 0.35p/litre.

Peter Walker, the firm’s director of milk buying, said: “The market is very tough.

“It isn’t just about returns from the retail liquid sector but values in the whole milk chain.

“We have to strike a balance between funding investment for the long-term and maintaining milk prices in the short term.

“We have held the producer price for as long as we could but now market realities have forced this change. This change fully reflects present market pressure.

“We hope it sets a price which will hold and we see no reason for other companies to use this move as an excuse to introduce further prices reductions.” 

Jonathan Ovens, chairman of Arla Foods Milk Partnership, which supplies most of the processor’s milk, said a fall in commodity values was largely to blame.

“Excess fat is worth 10p/litre less than a year ago.” Arla had 90m litres of surplus cream to dispose of each year, he added.

But Tom Hind, chief dairy advisor at the NFU, said the reasoning behind the cut was unfathomable.

“Nobody ever benefits from higher butterfat prices. This will be met with dismay.”