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Arla under fire for confusing price reporting - leaving farmers feeling 'misled'

The co-operative was criticised after its January price cut announcement left farmers feeling ‘confused and misled’.


Alex   Black

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Alex   Black
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Arla under fire for confusing price reporting - leaving farmers feeling 'misled' #TeamDairy

Arla announced a 1.3ppl drop for January.

 

The full 2.5 euro cent drop from Arla was mitigated for British farmers by the currency smoothing mechanism and an adjustment in cashflow, by 0.85ppl.


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According to dairy analyst Ian Potter, the cut could be anywhere between 0.57ppl and 2.11ppl, dependent on which initiatives members had signed up to.

 

“Is it straight forward? No it is not. I sat down and read it several times to get to the correct figures,” Mr Potter said.

 

Incentives

 

The standard manufacturing litre price of 31ppl quoted also included the Arlagarden plus incentive, which adds 0.84ppl.

 

Mr Potter highlighted 72 per cent of farmers had achieved the standards, which explained why it was now included in the standard litre price.

 

Arla said full information on the extent of the price cuts was available to farmers.

 

An Arla Foods UK spokesman claimed the decrease had come about due to reductions in butter and cheese prices of about 30 per cent in the past two months.

 

“It remains Arla’s central mission to secure the highest possible value for our farmer owners’ milk, and Arla continues to pay a competitive milk price dictated by a transparent formula agreed by our elected board of farmer representatives," the spokesman said.

 

“This formula includes the reintroduction of money having rebalanced the cashflow, and the quarterly currency smoothing mechanism, as well as the Arlagarden Plus incentive.

 

"From January, the ONE milk collection initiatives will also take effect.”

 

Board changes

 

Mr Potter suggested part of the problem was Arla removing Jonathan Ovens from the board.

 

“They have got rid of the one person members relied on to fight their corner,” he said.

 

He added he did not know whether farmers were worse off without Mr Ovens, but they were ‘certainly not better off’.

 

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