Arla milk price rise pushes manufacturing litre above 30p

The UK’s largest milk processor, Arla, has increased its standard non-aligned milk price for September in conjunction with the release of the co-op’s half-year results.

The Arla price will increase by 1 eurocent per kilogram for its 11,200 European farmer owners from 1 September.

The rise equates to 0.83p/litre taking the Arla price to 30.79p/litre when applied to’s standard manufacturing litre at 4.2% butterfat and 3.4% protein.

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The co-op’s liquid price will be 29.61p/litre, an increase of 0.79p/litre based on 4% fat and 3.3% protein.

The Arla manufacturing price has risen by 3.06p/litre in the past three months, an increase of 11% – taking farmgate milk price 42% higher than it was 12 months ago.

Arla’s amba board director Jonathan Ovens said the improved price was a result of strengthening markets.

Half-year results

Arla’s financial results in the six months to June 2017 showed a revenue increase of 2% in Europe, to €5 billion (£4.6bn).

The co-op’s average milk price rose by 33.3% across Europe to 33.3 eurocent a kg (30.3p/litre) in June 2017 compared to 12 months previous.

“The improving market conditions, driven by increasing milk fat and protein prices, particularly in Europe over the recent months, is indeed good news for Arla and our farmers,” said Arla CEO Peder Tuborgh.

“As the market continues to improve, the second half of 2017 should be even stronger.

“We expect to meet our targets on revenue, profit share, leverage and strategic brand growth.”

Mr Tuborgh added, “We expect the positive price trends to continue and we have introduced further increases in our prepaid milk price to our farmers in July, August and September and expect to sustain this high level for the rest of the year.”

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