Arla cuts May price by 0.9p/litre

Arla has cut its milk price from 1 May by 0.9p/litre following a reduction in the price of cream and other dairy commodities.

The change will see its standard price drop to 29.89p/litre for conventional milk and 38.93p/litre for organic milk, bringing the price back to where it stood before the 0.9p/litre rise in March.

The farmer-owned co-operative, which has some 2,500 producers in the UK, retains its position at the top of the milk price league.

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Reduced demand

Commodity prices have been falling since the outbreak of the coronavirus crisis following the closure of food service businesses, which has reduced demand.

However, Arla is among the least-affected UK processors as it has a number of supermarket liquid milk supply contracts, including Asda’s exclusive Farmer’s Milk brand.

It is also the UK’s biggest cheese producer, has its own brand of yoghurts, and makes Lurpak and Anchor butter.

Arla Foods amba board director, and farmer owner, Arthur Fearnall, said: “Because of the COVID-19 pandemic and the actions taken by governments to limit its spread, the dairy market has moved into unprecedented territory. 

“Despite some short-term increase in retail sales, the closure of many food service businesses – alongside the spring peak in milk production and the uncertain global economic outlook – has caused significant reductions in commodity market prices across all categories in the space of a few weeks.

Following a meeting last week between Defra, farming unions and dairy processors, the government said it would take further steps to ease competition laws and allow processors to collaborate and more easily move milk supplies to where there is demand.

Arla’s agriculture director, Graham Wilkinson, said the firm welcomed the opportunity for the industry to work more closely together at this time and build robust plans to navigate through the crisis.

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