Arla farmers face milk price drop for June

Arla members in the UK face a 0.84p/litre cut to their milk price, as dairy markets show no sign of an upturn.

The co-op’s 3,000 British farmers will be paid 24.99p/litre from 25 May.

That price is 8.75p/litre or 26% lower than for the same month in 2014.

Arla raised its milk price by 1.5c/kg (about 1p/kg) in April and held for May, as the global dairy trade appeared to be in recovery.

See also: Dairy Crest suffers painful profit drop

Arla UK’s head of milk and member services Ash Amirahmadi said the commodity markets had continued their negative trend, after a brief upturn.

“While we continue to do everything possible to minimise the effects, unfortunately we have not been able to buck the market,” he said.

“The entire global dairy industry has been affected by these market forces.”

In the past four weeks, key global benchmark the GDT auction has fallen twice and all the gains made since December have been wiped out.

Spot milk prices have improved after the UK passed its spring production peak, but markets across the world remain under pressure.

NFU dairy board chairman Rob Harrison said Arla’s news was another setback, with British milk prices already at unsustainably low levels.

“I cannot emphasise how important it is that other processors base the price they pay their farmers on their own product mix and continue to search for maximum value throughout the supply chain, rather than idly following one another to the bottom.”

Other leading milk processors are expected to announce their July milk prices in the coming week.

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