Arla Foods has confirmed a milk-price increase for August 2022, increasing the on-account price by €1.0c/kg for both conventional and organic milk.

This equates to an increase in Arla’s farmgate milk price for the standard manufacturing litre by 90p/L.

This brings the price for conventional milk to 50.35p/L and the price for organic milk to 56.01p/L from August 1.

Arla Foods amba board director, and farmer owner, Arthur Fearnall, said: “As farmer owners, this further increase to our farmgate milk price for both conventional and organic milk is certainly welcomed.

“The continuing on-farm cost pressures for feed, fertiliser and fuel have been further exasperated over the last month due to the extreme dry weather. Commodity prices have weakened in recent weeks however, they still remain at a high level. The outlook is stable.”

Agriculture director for Arla UK, Paul Savage, added: “As a co-operative, it is vital that we continue to support our farmer owners during this significant inflationary period.

“On-farm cost pressures continue to dampen the overall supply of milk across Europe and the extreme dry weather has added extra pressure to our farmer owners and consequently, their on-farm costs.”

Arla expansion

In other Arla news, in May, the company officially opened a €190 million expansion of its dairy production facility in Germany in a bid to meet global demand.

In its biggest dairy investment to date, the European co-operative is increasing the production of milk powder at its site at Pronsfeld in the west of the country.

Construction of the new production plant began in 2019. It will process 685 million kilograms of milk per year, and includes a 51m drying tower as its centerpiece.

The facility will produce around 90,000t of high-quality milk powder annually.