Arla’s price for conventional milk for UK farmer owners will reduce by 1.3 pence for the manufacturing litre, taking it to 31 pence from 1 January 2018.

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This follows on from similar announcements from Mueller and Meadow Foods, although First Milk decided to hold their price.

The full Arla Foods amba reduction in the milk price of 2.5 eurocents for conventional milk and two eurocents for organic milk has been mitigated by a positive movement in the currency exchange rate of 0.64 pence.In addition, the reintroduction of the money used to balance the UKAF cash flow, between July and December 2017, equates to a further 0.21 pence per litre.

Commenting on the decision to reduce the price, Arla Foods amba board director, Johnnie Russell, said:

“The reduction in the milk price is a consequence of the recent significant falls in commodity markets where we have seen reductions in butter and cheese prices of circa 30 per cent in the last two months.This has impacted across all markets and these factors have resulted in the reduction in the milk price.”

The January on-account price includes the Arlagården Plus incentive.

As presented at the autumn district meetings, the ONE milk collection initiatives which take effect from 1 January 2018, could increase the price by up to 0.7 pence per litre.