Arla farmers offered supplementary payments as revenue soars

Dairy farmers supplying major processor Arla are due to receive a supplementary payment of 2.2 eurocents/kg (1.9p/kg) after a record year for the co-operative.

Group revenue at Arla Foods increased to €15.1bn (£13.2bn) in 2025, driven by high commodity prices in the first half of the year and record milk volumes.

Net profit lifted to €415m (£362m) in 2025, representing 2.8% of the group’s total revenue.

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Arla Foods chairman Jan Toft Nørgaard said: “I am pleased we can propose a solid supplementary payment after a year that demanded immense agility from our owners.

“We shifted from tight supply of milk to a sudden abundance, which naturally creates pressure on the market.

“As a farmer, it gives me confidence to see our co-operative navigate this volatility and once again prove its worth as a strong, competitive home for our milk.”

Arla Foods also achieved strong revenue growth in the UK market with revenue up by the equivalent to £130m.

Bas Padberg, managing director at Arla Foods UK, said: “The early months were shaped by some of the highest commodity market prices we have seen, increasing the value of dairy.

“We then saw the previously tight supply of milk, accelerate extremely quickly, leading to a rapid decline in commodity market prices.

“As a co-operative, our priority is always to support our farmer owners with external volatility to ensure resilience, confidence and the ability to continue producing high quality dairy products.”

Arla continues to invest in UK dairy and has committed more than £144m at its Lockerbie site in Scotland, along with £179m at its Taw Valley site in Devon, which is due to begin producing mozzarella next year.

Dairy markets outlook

The group has projected that its revenue will fall slightly in 2026 and has forecast it between €13.3bn (£11.6bn) and €14.1bn (£12.3bn).

Arla expects dairy markets to continue to be volatile in early 2026 with large supplies of milk weighing on global prices.

However, it anticipates a partial normalisation later in the year as supply and demand dynamics adjust.

Peder Tuborgh, chief executive of Arla Foods, said: “The pressure from high milk volumes will characterise the first part of the year, but we also see the opportunities this brings.

“As prices adjust, we expect consumers to return to the dairy aisle with renewed strength, driving growth for our strategic brands.”