Arla Foods raises milk price to 20p a litre

The dairy processor, which owns brands Cravendale, Anchor and Lurpak, announced its milk prices would rise to 20.05p per litre next month. That equates to around 11.4p a pint.

NFU dairy board chairman Michael Oakes said: “As expected, the Arla milk price has moved upwards for September. This will be a relief to their 3,000 owners in the UK, of which I am one.”

Arla Foods amba board director Jonathan Ovens said: “This is welcome news for our farmer owners who continue to face challenging times on farm. Our increase will hopefully reaffirm their confidence in the dairy industry, after 18 months of falling prices.”

Unsustainable

However, Oakes said that the new 20p a litre price is still unsustainable, and larger milk suppliers should do more to increase the price of their products.

“Clearly 20.5p per litre is far from a sustainable milk price, but at least prices are now moving in the right direction and this must continue,” said Oakes.

“Here in the UK other smaller milk buyers have been fleet of foot in moving milk prices, albeit from a lower base, and have already started delivering improved returns to their supplying farmers.

“We now need to see other major milk buyers start doing the same as they are clearly achieving better returns from the market.”

Arla’s decision to increase milk prices came after Wyke Farm’s md Richard Clothier blamed “eye-wateringly cheap prices” on the closure of more than 1,000 UK dairy farms since 2013.

‘Fewer dairy companies’

Clothier told FoodManufacture.co.uk: “We are seeing a consolidation of the dairy sector across the board, with fewer dairy companies but larger suppliers.

“The weak euro, weighed down by the southern EU economic problems, has made imports of manufactured dairy products come into the UK at eye-wateringly cheap prices that are just not sustainable for UK suppliers and manufacturers.”

Meanwhile, Arla Foods has recently launched a new healthy living breakfast campaign. The Choose Goodness campaign was introduced as part of the company’s £100M commitment to support healthier living.