Dairy farmers are taking another blow as three of the UK’s major milk buyers have announced further price drops.
Arla has taken the biggest plunge and will drop significantly from April 1 as the co-operative has announced a 5.30p per litre decrease.
Its farmgate milk price will fall to 39.64p per litre for a standard manufacturing litre, while organic producers will receive 44.42p per litre.
The co-op, which is supplied by 3,000 UK farmers, said that the severity of the cost-of-living crisis and volatile economic environment was continuing to negatively impact consumer demand for milk.
Milk price cuts as global volumes increase
Arla Foods director, Arthur Fearnall, said commodity prices continued to decline significantly especially as global milk volumes increase overall.
He said the outlook is moving towards stabilisation as commodity markets get closer to balance.
Paul Savage, agricultural director for Arla UK, added that milk supply in the UK had continued to grow in the last month, with milk supplies up 3.2% compared with March 2022.
“We recognise that some of our farm owners continue to face increasing input costs on farm and as a farmer-owned cooperative we are doing all we can to continue to support our farmer owners,” said Mr Savage.
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The cost-of-living crisis and volatile economic environment is continuing to negatively impact consumer demand for milk.
First Milk customers have also received a drop, with the company reducing its milk price for May by 3.49op per litre.
The dairy giant, which also received B Corp status this week, announced that from May 1, it will pay 39.29p per litre on a manufacturing standard litre, including the member premium.
‘Very conscious of the challenges facing dairy farming businesses’
Robert Craig, farmer director and vice-chairman, said: “We are very conscious of the challenges facing dairy farming businesses arising from the speed and scale with which milk prices have reduced across the market.
“Whilst current market circumstances are unwelcome, as always, we will continue to work to maximise our members’ milk price in the months ahead.”
Meanwhile, Muller has announced a 2.5p per litre milk price fall for May to fall at 40p per litre.
Richard Collins, head of agriculture at Müller Milk and Ingredients, said the change comes during continuing market pressures: “Millions of people buy our dairy products every day and we remain committed to paying a competitive milk price and ensuring security of supply.”
According to the Agricultural and Horticulture Development Board (AHDB), the GB milk production is forecast to reach 12.44 billion litres for the 2022/2023 season, up 0.7% on the previous season.
On a calendar year basis, GB production is expected to total 12.43 billion litres.
This is a 0.3% improvement on 2022, equivalent to an additional 39 million litres.
