Arla to hold milk price but warns of reducing commodity prices

Arla Foods’ conventional milk price will be unchanged for November 2018, with the UK manufacturing price remaining at 32.47p/L.

However, commenting on the decision, Arla Foods amba board director Johnnie Russell warned that prices were likely to tighten going forward.

“We have not yet seen any knock-on impact of the summer drought and while global milk supply is currently stable, there has been a significant reduction in butter and cream commodity prices,” he explained.

“The market development creates pressure on the business.”

The manufacturing price is based on every other day collection for one million litres of top quality milk at 4.2% butterfat and 3.4% protein.

Arla farmers are paid on constituents via a manufacturing schedule – for ease of comparison, the liquid price is 31.21p/L, based on 4% fat and 3.3% protein.

The on-account price for organic milk will also remain unchanged from November 1.

Back in June, the firm became the first major UK milk processor to cross the 30p/L mark, setting its standard litre price at 30.5p/L.

Arla Foods UK

The global dairy company and co-operative is owned by 11,200 dairy farmers, around 2,500 of whom are based in the UK.

Arla is the largest dairy company in the country and is home to leading dairy brands Anchor, Arla Cravendale, and Arla Lactofree with a turnover of €2.9 billion.

The UK is the firm’s largest market within Europe, contributing 35% of the zone’s turnover and 25% of the group revenue.

It has also built the world’s largest fresh milk facility located at Aylesbury that later this year will become the first net zero carbon site of its kind.

The UK business has a team of approximately 3,500 colleagues located at its dairies, creameries, distribution centres and head office.