Arla milk price drops 2.65p/litre in February

Arla has dropped its milk price back below 50p/litre, as falling wholesale milk and dairy commodity prices put pressure on the returns passed back to farmers.

The co-op’s on-account farmgate milk price is set to decrease by 2.65p/litre from 1 February for both conventional and organic milk, dropping to 48.47p/litre for a standard manufacturing litre of 4.2% butterfat and 3.4% protein.

Organic producers supplying Arla will be paid 53.25p/litre in February.

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Arla Foods amba board director and farmer-owner Arthur Fearnall said: “Consistently high inflation continues to drive a reduction in consumer demand as shoppers look to lower their overall basket spend.

“As consumer demand falls, milk volumes in the commodity market continue to increase, thus pushing commodity prices down further.

“The organic market is also reacting in a similar way, as consumer consumption continues to react to the high inflation coupled with less demand. The outlook is negative, driven by a decline in commodity prices and reduced consumption.”

Paul Savage, agriculture director for Arla UK, said the uncertain economic outlook means farmers are currently facing a declining commodity market.

“We know our farmer-owners are still facing significant input costs for labour and energy, and we remain committed to continuously looking for ways to deliver the most value to our farmer-owners’ milk,” said Mr Savage.