European dairy co-op Arla Foods amba has announced it will raise its milk price from February by €0.01, reflecting strong demand in international markets.
This is expected to convert to a 0.7-0.8p/litre rise for Arla’s 2,800 co-op members in the UK.
Arla’s increase comes at a time when UK cream and butter prices are falling, but demand for milk powder in China and other UK dairy products in foreign markets is strong.
Farmers For Action (FFA) said it was pleased with Arla’s rise and had contacted other milk processors asking them to follow suit.
“We have not stopped putting pressure on milk processors,” said FFA chairman David Handley.
“We still firmly believe the domestic and the global market is in a place where UK processors’ prices should be going up.
“We still firmly believe the domestic and the global market is in a place where UK processors’ prices should be going up.”
“We will be watching this space now. At the moment our farmer members are telling us to keep the pressure up doing what we are doing at committee level.”
John Allen of Kite Consulting said the increase should be welcomed as UK farmers had been clamouring for access to European prices.
“Long term, if we are going to grow UK dairy then we need to be able to access these markets,” he said.
“Of course we are going through a period of adjustment here while everybody learns the rules of a new game.
“It is going to take a while to adjust to the changing situation.
“People in the supply chain need to look at their processors and see that they have access to international markets.”