Farmgate milk prices face further cuts in February and March

Farmers supplying major dairy co-operative Arla will face an additional 1.75p/litre price cut for February, taking its standard manufacturing litre to 33.98p/litre.

Arla producers will receive 14.29p/litre less in February than the same month last year.

The processor says farmgate prices remain under pressure in the short term due to plenty of supply across Europe.

See also: UK dairy markets find floor, but prices remain in decline

Supply and demand are reportedly still “out of balance”, however there as some indications that the market may now have reached the bottom of its cycle.

Organic producers supplying Arla will continue to receive 57.98p/litre for February.

Farmgate milk prices in the organic dairy sector have fared much better with Arla’s organic price just 0.28p/litre below the same month last year.

The premium paid to organic produced above the conventional price has widened to 24p/litre, compared with 10p/litre 12 months ago.

Conventional dairy producers supplying Muller face a 1p/litre cut in March taking its standard liquid litre price of 34.5p/litre, including the members advantage premium.

Muller’s agriculture director, Richard Collins, said: “There continues to be significant pressure across dairy markets.

“Milk collections remain well above the levels we saw at this point last year, and market prices have continued to reduce.

“We are continuing to track supply and demand developments carefully.”