The price will drop 1.08ppl from January 1
Arla has confirmed the on-account prices for conventional and organic milk will decrease by 1.2 euro cents per kg from January 1.
When applied to the UK manufacturing price, this equates to a 1.08ppl drop taking the conventional price to 29.58ppl.
The quarterly currency smoothing mechanism, which this month is 0.05ppl was offset by a cashflow balancing adjustment.
Arla Foods amba board director, and farmer owner, Arthur Fearnall, said: “Whilst global commodity prices have remained relatively stable, European prices particularly for fat, yellow cheese and mozzarella, have weakened of late in response to growing milk volumes and continuing uncertainty around COVID-19 impacts and Brexit.
“These market uncertainties are impacting the overall market for organic milk as well. As we go in to 2021, subject to the outcome of the Brexit negotiations, the current outlook is stable.”
Alice Swift, UK Agriculture director at Arla added: “While a decrease is never welcome news for farmers, despite a very disruptive period, we have managed to maintain a relatively stable conventional milk price over the last couple of years.
“Throughout the exceptionally disruptive and challenging year we have faced in 2020, our teams across the UK have continued to worked tirelessly to ensure we successfully played our part in feeding the nation and minimised any potential disruption for our customers.
“This continues as our nutritious dairy products make their way to millions of households across the UK as they prepare for Christmas.”