Arla holds July milk price in ‘more stable’ market

Dairy giant Arla has backed up more encouraging milk market news by holding its price for July.

The co-op has frozen its Europe-wide price and hinted the market could be levelling out.

Arla’s 2,700 British farmers will see their payments fall just slightly, by 0.07p/litre, due to exchange rate calculations. They will get 19.05p/litre in July.

See also: 8 factors driving the dairy recovery

The news follows predictions of a tentative milk market recovery and Meadow Foods’ announcement of a first price rise.

There is still a long way to go: Arla’s price fell heavily this spring and is now almost 5p/litre below last year’s levels.

Arla Foods board director Jonathan Ovens said milk supplies into Arla had been falling, which was balancing supply and demand.

“As a consequence, market prices that we have seen deteriorate over the past 12 months are levelling out,” he said.

“The trend towards a more stable market situation has strengthened over the past month and although we are not yet in a position to increase the price, holding the price sends out a signal to our owners, who continue to face challenging times, that we believe the market situation is more stable.”

With farmers in seven countries, Arla is directly linked to European and world markets.

Latest figures from the European Commission show milk production growth has slowed across the continent, which will lend support to prices.

The 28 EU member states pumped out 1.1% more milk a day this April, compared with the previous year. Between October and March, those countries had been collectively running 5% up on the year.

Fat prices have been leading commodity prices upwards, according to AHDB Dairy. Average EU butter prices have risen 11% in three weeks – the best improvement in three years.

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