Arla Foods is raising its on-account price from March 30 by 1.5c/L, the company has said.
It says that Sterling has continued to strengthen and April sees a new quarter’s (January to March) average exchange rate being introduced to the pricing mechanism.
When the impact of the currency smoothing mechanism is taken into account, Arla Foods says that this raises the UK standard litre by 0.83 pence, taking it to 25.8p/L.
Ash Amirahmadi, head of UK milk and member services, said that the markets have shown an upward trend recently, in particular due to a reduction in milk production in parts of Europe and New Zealand.
“Global Dairy Trade (GDT) auction prices reduced in the last auction and, consequently, there is uncertainty as to whether the positive trend in 2015 is sustainable. The impact of the abolition of quotas post April will be a key factor in this,” he said.
Johnnie Russell, Arla Foods Farmer Board Director, said that this increase is welcome news for its 3,000 British farmer owners at an extremely difficult time.
“It underlines the advantages of being a member of a farmer-owned business with a global reach, a broad range of products, and most importantly a transparent and democratic pricing model where increased business revenues are reflected in the milk price,” Russell said.
Arla Foods dates back to 1881 and is a global dairy company and co-operative owned by 13,500 dairy farmers circa 3,000 of whom are British. It has production facilities in 11 countries and sales offices in a further 30, Arla is the world’s sixth largest dairy company and largest supplier of organic dairy products.
