Dairy farmers supplying Arla have been gifted the “worst possible Christmas present” with the news they face another cut to their milk price in January.
The European farmers’ cooperative announced on Tuesday, December 23, it will cut its standard litre milk price by 2.03 pence to 24.81p a litre from January 5.
This follows a 1.63 pence price cut on December 1.
The company, which produces Lurpak, Anchor and Cravendale, said the latest price cut was a result of a European-wide reduction of 2.5 eurocents per kilo to its price.
Arla’s head of milk and member services in the UK, Ash Amirahmadi, said: “Global supply and demand are still out of balance which is continuing to create downward pressure.
“The knock-on impact of weak international prices on the European markets has affected Arla’s business performance as well as that of the entire dairy industry in Europe.”
He said the recent upturn in the Global Dairy Trade auction was welcomed but warned “it is too early to conclude that there is any change in underlying market conditions”.
Responding to the news, the National Farmers Union south of the border said the price cuts were nothing short of “devastating” for the 3,000 Arla suppliers who had been delivered “the worst possible Christmas present” just hours before Christmas day.
ENFU president Meurig Raymond said the cut couldn’t have come at a worse time for the industry.
He said: “This latest reduction will continue to place huge pressure on cash flows for these farmers in the months ahead. It is vital that we don’t see this trend continue through other processors’ February price announcements.”
His colleague, ENFU dairy board chairman Rob Harrison, said the announcement was another “body blow” for the industry which will “further devastate dairy’s bottom line”.
Mr Harrison said: “Despite this news, dairy farmers across the country, including myself, will continue to provide the nation’s milk working 52 weeks a year, without a break, and yes, even on Christmas day we’ll be up and in the parlour at 4am before being able to spend some precious time with our children and families.
He issued a plea to the public to continue purchasing British dairy products over the festive period including British cheese.
This month the main milk buyer in the north and north-east, Muller, confirmed it would be cutting its milk price in January.
The dairy giant will cut its standard litre milk price by 1.2 pence to 25.9p a litre on January 10.
It blamed a double whammy of record milk being produced on farm and weak demand for the cut to its price.
This followed an announcement from UK dairy farmers’ cooperative First Milk that it would be cutting its milk price on January 1 as a result of falling market returns.
The co-op will cuts its standard litre liquid price by 1p to 21.7p a litre, while its manufacturing price will fall by 1.1p to 22.9p a litre.