The UK dairy sector has been dealt another blow with news Arla is going to cut its milk price on May 1.
The European farmers’ co-operative, which produces Lurpak, Anchor and Cravendale, will reduce the price it pays its 2,700 UK farmer suppliers by 0.75p to 20.12p a litre.
Arla said the price reduction was the result of a European-wide farmgate price cut of one eurocent per kg.
The firm blamed several factors for the latest price cut – the continued imbalance between global supply and demand, high stocks of cheese, and a very competitive market environment.
The co-op’s farmer board director in the UK, Johnnie Russell, said: “The continuing decline of milk prices is of deep concern to all involved in the dairy industry and the entire world market is at an unsustainably low level right now.
“Arla is doing all it can to mitigate the downturn of the markets and is working hard to move the extra milk volume from our farmer owners into branded sales and foodservice. However, even those areas are also now being affected by the global imbalance between supply and demand.”
The firm also supplied that its direct farmer suppliers – those who are not co-operative members – will incur a 0.9p a litre price cut on June 1 bringing their milk price to 15.1p a litre.