Arla posts record performance price but warns of tougher 2026
Arla Foods has delivered record returns to its farmer owners after posting its strongest financial performance to date in a turbulent year for global dairy markets.
The cooperative reported a competitive performance price of 56.4 eurocent per kg (48.5p/kg) in 2025 and the board has proposed a supplementary payment of 2.2 eurocent per kg (1.9p/kg) of milk delivered.
Group revenue reached a record EUR 15.1 billion (£12.99 billion), supported by Arla’s highest-ever milk intake of 14.3 billion kg and strong commodity prices in the first half of the year.
Net profit totalled EUR 415 million (£357 million), reflecting what Arla described as a highly competitive full-year result.
Chief executive Peder Tuborgh called the performance “historic”, saying it showed that “our strategy is working”.
“We have strengthened our market position, delivered record value for our farmer owners, and taken important steps toward a more sustainable future,” he said.
The results come after a year of sharp swings in European dairy markets.
Strong demand and balanced supply early in 2025 shifted dramatically in the second half, when favourable weather and strong feed harvests across Europe triggered a rapid surge in milk production.
Milk supply rose significantly in key Arla markets, including the UK and Denmark, up 7.7% and 3.6% respectively compared with 2024.
The sudden uplift forced global trading prices down, creating a natural market correction and putting pressure on milk values across the sector.
Chair of Arla Foods Jan Toft Nørgaard said the cooperative had once again proved its resilience.
“We shifted from tight supply of milk to a sudden abundance, which naturally creates pressure on the market,” he said.
“As a farmer, it gives me confidence to see our cooperative navigate this volatility and once again prove its worth as a strong, competitive home for our milk.”
Arla said its diversified business helped cushion the downturn.
Arla Foods Ingredients delivered revenue growth of 43.1% to EUR 1.452 billion (£1.25 billion), driven by demand for value-added protein and the integration of the Whey Nutrition business acquired from Volac.
Across the wider group, efficiency gains of EUR 158 million (£136 million) also supported stability through the late-year market correction.
“It is in volatile times like these that our strategy truly proves its worth,” Mr Tuborgh said, describing the shift as “a natural market cycle where high milk production brings prices down across the sector”.
Despite the downturn, Arla continued to invest heavily in future growth, committing EUR 731 million (£629 million) in 2025.
Key projects included the creation of a UHT Centre of Excellence in Lockerbie, Scotland, and a major expansion at Holstebro Dairy in Denmark to increase cream cheese production by 16,000 tonnes.
In the UK, Arla recorded solid revenue growth despite softer branded volumes.
Net revenue rose 5%, equivalent to EUR 152 million (£130.1 million), while branded volume dipped by 3.2% amid higher price levels earlier in the year.
Managing director Bas Padberg said 2025 had been shaped by extreme commodity swings.
“The early months were shaped by some of the highest commodity market prices we have seen,” he said.
“We then saw the previously tight supply of milk accelerate extremely quickly, leading to a rapid decline in commodity market prices.”
On sustainability, Arla reduced Scope 1 and 2 emissions by a further 5.6 percentage points, reaching a cumulative reduction of 43.6% compared with its 2015 baseline.
Looking ahead, Arla expects the supply-driven market correction to continue into early 2026.
Group revenue for 2026 is forecast to range between EUR 13.3 billion and EUR 14.1 billion (£11.44 billion–£12.13 billion), while net profit share is expected to remain within the 2.8% to 3.2% target range.
“We enter 2026 fully prepared for the market conditions ahead,” Mr Tuborgh said.
After a record year, 2026 is set to test how resilient that performance really is.
