Arla fulfils price cut return pledge

Arla Foods UK has fulfilled its promise to return two-thirds of the 0.9p/litre milk price cut imposed on suppliers during February and March.

The 0.6p/litre slice of the reduction was a one-off, backdated hit to cover falling cream values.

But there had been speculation that the processor would renege on the deal, which was offered to the Arla Foods Milk Partnership, its main supplier, in return for a more transparent market-related pricing structure.

But AFMP chairman Jonathan Ovens said it had never been in doubt and under the new pricing structure, which commenced in April, most AFMP members would now receive a standard-litre price of 19p/litre, with those supplying Asda getting an extra penny.

But Mr Ovens could not confirm specific details of the new scheme or for how long the price would hold.

“Hopefully, by the middle of the month we will have a much better idea, but it has been more difficult than I was expecting.”

Commercial considerations might limit the amount of information made available to farmers, he said.

Cream values have firmed recently by the equivalent of 0.05p/litre due to a weakening of Sterling, according to Milk Development Council figures.

Mr Ovens said if the rally was sustained it would be factored into Arla’s milk price.