Arla's milk price to increase from 1 March

Arla Foods amba has increased its milk price for March 2020
Arla Foods amba has increased its milk price for March 2020

Arla’s price for conventional milk will increase to 30.94 pence per litre from 1 March 2020 for its farmer owners.

Arla, the UK's largest dairy company, will increase its account price for milk by 1 eurocent, or 0.90 pence per litre.

Organic milk price will, however, decrease by 1 eurocent for March 2020, or 0.90 pence per litre, to 39.98ppl.

Arla Foods amba Board Director, Arthur Fearnall, explained that global milk production, having been stable through most of 2019, ended the year with most major exporting areas starting to show growth in production.

"Only in Oceania did volumes decline, due to hot and dry conditions particularly impacting New Zealand," he said.

"Commodity markets remain strong, though the recent trend of increasing protein prices and reducing fat prices continue, particularly in Europe.

"Whilst the market fundamentals appear unchanged, the fear of reduced demand in Asia due to the Coronavirus has had a negative impact on global powder prices. Markets do not like uncertainty.”

Graham Wilkinson, Agriculture Director at Arla Foods UK, noted that UK organic milk production has remained strong but demand has weakened, resulting in an imbalance in the market.

He said: "Whilst the reduction to our organic price is unwelcome for our farmer owners, as a business it remains a strategic priority for us and is why we remain committed to continuing to fuel the growth of organic products and expanding our organic portfolio to offer consumers greater choice.”