Arla UK has announced a milk price drop price for June ’to re-balance the cash flow’
NFU has expressed its disappointment as Arla UK announced a 0.4ppl price drop while products like butter were ’trading at record highs’.
NFU dairy board chairman Michael Oakes questioned who was benefitting from high cream and butter prices ’as it clearly is not dairy farmers’.
Arla Foods Amba announced it would hold its price in June.
But Arla’s UK price will drop by 0.4ppl which takes the manufacturing standard litre price to 27.73ppl.
It followed the decision to hold the UK price in May, despite a drop from the Arla Foods Amba.
NFU dairy board chairman Michael Oakes said last month he had ‘applauded’ the UK Arla Farmers board.
“Little did I know at the time that they would seek to rebalance the UK purse so soon,” he said.
He added EU butter markets were ‘exceptionally good’ and farmers were questioning ‘what was going on’.
“With spells of dry weather impacting on grass growth - and ultimately volumes - and the GDT market continuing to strengthen, it makes no sense that are we are now seeing milk price reductions.
“Last month it was Dairy Crest announcing a 1ppl cut for June and a further 1ppl cut for July, with County Milk Products even backdating milk price cuts.
“While Arla mentions that markets are stabilising and we are seeing more and more positive signs at the trading end – I would hope that this would be reflected in the farmgate price.
He called for a more transparent market which built trust through the supply chain.
“This makes it even more relevant that we continue our call for better market transparency through mandatory dairy price and volume reporting – something that we are lobbying Government for as we leave the EU.”
Johnnie Russell, Arla Foods amba board director, said: “Last month Arla Foods amba reduced its price by one eurocent but the UKAF board made the decision to manage the impact of this cut through the UKAF cash flow, for the month of May, and held the price to prevent a double impact of a milk price reduction, at the same time as maximum seasonality deductions.
“However, the UKAF board believes that it is necessary to make a small downward adjustment to the milk price, from 1 June, of 0.4 pence per litre, to re-balance the cash flow.”