Arla expects full-year revenue between 13.4 and 13.9 billion euros.

Denmark’s Arla, one of the world’s biggest dairy producers and the maker of Lurpak butter and Castello cheese, raised its full-year revenue outlook on Wednesday and said it expected prices to rise, despite reporting a drop in first-half revenue, Reuters reported.

While dairy prices declined in late 2023 and early 2024 from historically highs levels early last year, a shift in the balance of supply and demand was again making products more expensive, Arla said.

“As the global milk production saw a decline in the first half of 2024, the global dairy price levels in commodities, retail and foodservice generally continued the upward trend, enabling price increases across markets,” Arla CEO Peder Tuborgh said in a statement.

The company said it expected a positive trend in consumer purchasing power from the first half of 2024 to extend into the second half of the year, especially in Europe, as inflationary pressure continues to subside and wages increase.

“Demand for dairy is likely to keep rising, although it is unclear how consumers will respond to higher retail prices after the commodity price increases in the first half of 2024,” the company said.

Revenue in the January-June period decreased 6% from a year earlier to 6.6 billion euros ($7.35 billion), after historically high dairy prices had boosted revenue last year, the company said.

Arla now expects full-year revenue in a range of between 13.4 billion and 13.9 billion euros, up from 13.2 billion to 13.7 billion euros seen previously, citing increasing prices and volume expectations.

($1 = 0.8977 euros)

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