Arla holds its farmgate milk price after months of falls

Milk processor Arla will hold its farmgate milk price at 33.98p/litre for a standard manufacturing litre in March, following six consecutive monthly price reductions.

The processor says there are indications of stabilisation on commodity markets at a global level, but adds that there is still plenty of supply across Europe.

Organic producers supplying Arla will continue to receive 57.98p/litre, although the outlook remains uncertain, with reports of weakening sales volumes affecting profitability in the organic sector.

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Improvements in global markets have helped alleviate some industry concerns, but an oversupply of milk is still creating challenging trading conditions.

GB milk deliveries surpassed 35m litres a day in late February, 4.2% ahead of the same week last year.

Milk volumes are expected to continue to climb throughout the next few months towards the spring peak.

Meanwhile, both the actual milk price equivalent (Ampe) and milk for cheese value equivalent (MCVE), used by industry as milk market indicators, lifted during past month.

The Ampe rose by 2.7p/litre on the month, taking it to 32.8p/litre in February, while the MCVE increased marginally to 32.7p/litre.

Wholesale prices for dairy commodities such as cream, butter and cheddar have also started to recover, although they remain well below year-earlier levels.

Global dairy trade has also improved, with values lifting at the past four auctions to average US$4,028/t (£2,988/t).