The board of UK Arla Farmers (UKAF) announced this Monday that it was cutting its base milk price by 0.4p/l to 27.73p/l at 4.2% fat and 3.4% protein. This is to reflect the cut applied last month by the co-op’s original Danish and Swedish branch, Arla Foods amba.

“Last month, Arla Foods amba reduced its price by one cent, but the UKAF board made the decision to manage the impact of this cut through the UKAF cashflow,” said UKAF chair Johnnie Russell. With the Scandinavian co-op maintaining the same price for June, its British branch is no longer able to support the price paid to UK farmers.

Commodities picking up

European co-ops cutting milk prices would send a worrying signal for the recovery observed over the past year. Processors have been under market pressure for key commodities in the first quarter of this year, but prices have recently improved again.

EU prices for skimmed and whole milk powder slowly picked up in the past two weeks after a slow decline since the start of the year, while butter is reaching new highs above €4,500/t and whey is also rising sharply.

The Global Dairy Trade (GDT) index rose for the fifth straight time last week after disappointing performances earlier this year.

In Ireland, Ornua’s purchase price index of key exported commodities was stable in April and co-ops left their milk price unchanged.

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