Arla members’ milk price will fall by almost 1p/litre from 1 April to 20.87p.
Reflecting what the co-op describes as an “extreme” situation for everyone in the global dairy market, the 0.94p/litre fall is made up of a 0.75p/litre price cut and a 0.19p/litre reduction to account for changing currency values.
Arla applies a quarterly average exchange rate to its UK pricing mechanism and this latest one reflects sterling-euro values in January-March.
Ongoing growth in milk production across Europe was continuing to put pressure on commodity and cheese markets, which was having a knock-on effect across other markets, said the co-op.
“The milk price is definitely not at a level that anyone wants it to be, but the business is continuing to work hard to mitigate the negative effects of the hard-pressed global dairy market,” said Arla Foods amba farmer board director Jonathan Ovens.
“We believe Arla has the right strategy to get through this, although the current situation is extreme for both Arla and everyone else in the global dairy market.”
NFU dairy board chairman Michael Oakes said UK milk production had pulled back since the turn of the year, with AHDB Dairy putting volumes down 1% on this time last year.
Mr Oakes repeated the call for processors to be honest and open with their suppliers and make it clear how they plan to get through the current market downturn.
“Arla says it has the right strategy – but are other farmers sure that’s the case with their own milk buyer? We need those discussions to happen now more than ever.”