It has been revealed that Arla milk producers will face a drop in farmgate prices from January 1, 2021.

The company has confirmed that a price cut of 1.2c/kg will be applied to conventional and organic milk from January 1.

When converting this to the standard UK manufacturing price this equates to a 1.08p/L drop, taking the conventional price to 29.58p/L.

Arla Foods board director and farmer owner, Arthur Fearnall, said:

"Whilst global commodity prices have remained relatively stable, European prices particularly for fat, yellow cheese and mozzarella, have weakened of late in response to growing milk volumes and continuing uncertainty around Covid-19 impacts and Brexit.

"These market uncertainties are impacting the overall market for organic milk as well. As we go in to 2021, the current outlook is stable."

'A decrease is never welcome news'

Alice Swift, UK agriculture director at Arla added:

While a decrease is never welcome news for farmers, despite a very disruptive period, we have managed to maintain a relatively stable conventional milk price over the last couple of years.

"Throughout the exceptionally disruptive and challenging year we have faced in 2020, our teams across the UK have continued to worked tirelessly to ensure we successfully played our part in feeding the nation and minimised any potential disruption for our customers."