It follows seven consecutive months of price rises
Arla has announced its milk price will decrease by 0.42ppl from April 1 bringing the manufacturing standard litre price to 28.13ppl.
The Arla Foods on-account price has decreased by one eurocent per litre which equates to a reduction of 0.79ppl.
However, a positive currency impact of 0.37ppl from 1 April, mitigates the full impact of the reduction.
Arla Foods amba board director, Johnnie Russell, said: “We are extremely disappointed to be in a position of having to reduce our milk price to our owners, after seven consecutive increases.
Always nice to go to an Arla meeting to be told price of milk will be going down even though they need milk as they're short 🤔— Georgina Fort (@SilmoorHolstein)
Always nice to go to an Arla meeting to be told price of milk will be going down even though they need milk as they're short \uD83E\uDD14— Georgina Fort (@SilmoorHolstein) March 22, 2017
"During that period, we have delivered an additional £76 million in milk price increases to our owners since September 2016. The reduction in our April price is unwelcome news," he said.
“Over recent weeks, the reduction in commodity prices has impacted yellow cheese, protein and spot market prices and this is putting pressure on the European market in particular.
"International value added markets on the other hand seem to be more stable.”
Stuart Dymond: “Asking us to produce more milk, then reduce milk price. Management shambles”
Ben Yendell: “This is a joke! Asking for more milk and then dropping the price!!!”
Michael Oakes: “The real price drop is 0.79ppl. No incentive to give them any more milk.”
John Clwyd Williams: “Just as was mentioned in our Arla meeting the other night! We knew it was coming! Still very disappointing.”
Alan Moore: “Trying to ruin dairy farmers again. Pleading for more milk and then dropping the price. Real geniuses.”
@ArlaFoodsUK don't dress it up it's a 0.79 drop, offset by +0.42 currency which should finally be working in our favour. Disappointing arla
— Matt Aidley (@MattAidley)
Back to the bad old days of Arla leading the price down!
— Steven Lawson (@DeersletSteven)
Back to the bad old days of Arla leading the price down!— Steven Lawson (@DeersletSteven) March 23, 2017
Bitterly disappointed to see Arla drop the price. I've defended them a lot over the last couple of months, but i feel let down.
— BoltonManor Farm (@TStable)
Bitterly disappointed to see Arla drop the price. I've defended them a lot over the last couple of months, but i feel let down.— BoltonManor Farm (@TStable) March 23, 2017
NFU dairy board chairman Michael Oakes said: "The price reduction of 0.79ppl announced by Arla for the April payment is extremely disappointing for its UK members and for the whole of the dairy sector.
"This is the first milk price drop in 2017 by a major UK milk buyer. With daily milk deliveries starting to recover before the annual Spring Flush, this clearly shows that the market is still in an extremely fragile state.
"That’s why the NFU is organising an NFU Dairy Risk Management conference on the 6th April, bringing together the whole dairy supply chain to consider new ways of managing price risk," he said.
“Paramount in managing milk price risk is better management of supply and demand both at farm and processor level. This includes more accurate forecasting of supply and demand and sharing of future growth strategies forecasts.”