Arla’s milk price for July will be cut after the co-operative said the impacts of the Covid-19 lockdown on the dairy sector were still being felt.
Prices for conventional milk will decrease by 0.75 euro cents per kilo and the UK organic milk price will decrease by 1.5euro cent per kilo from 1 July.
However, the figure will be positively impacted by a 0.03 ppkg quarterly currency adjustment.
When applied to the manufacturing price, Arla’s pence per litre for conventional milk will be 29.26p per litre and the organic price 37.62 ppl.
Arla board director, Arthur Fearnall said after the low commodity prices of March and April, prices had started to recently stabilise but at levels below pre-Covid-19.
"Demand remains uncertain as countries begin to open up but with differing levels of restrictions still in place," Mr Fearnall said.
"The UK organic market is seeing an imbalance between supply and demand in addition to Covid-19 uncertainties which is acting negatively on that market.
"Other organic markets remain stable, though subject to the same uncertainties from Covid-19 as the rest of the dairy market."
However, he said the current outlook overall was looking 'stable'.
Graham Wilkinson, UK agriculture director at Arla added: “Despite significant redeployment measures and the start-up of the foodservice sector our organic demand continues to be dis-proportionally impacted by the Covid-19 disruption.
"Therefore regrettably we need to reflect the lower returns in our organic milk price whilst continuing to work with our customers to try and minimise the Covid-19 impact.”
