Arla Foods UK is raising its price to Arla Foods Milk Partnership farmers (AFMP) and both groups of its direct suppliers, for conventional milk by 1.25ppl, and by 2ppl for organic milk, with effect from 1 June 2013.

The increase takes Arla’s standard litre prices for conventional milk (transport adjusted) (milkprices.com flagship litre) to:

Arla Foods Milk Partnership – 31.63 pence

Arla Milk Link Direct – 31.25 pence

Arla Foods Direct – 31.27 pence

In addition, Arla is introducing a growth incentive for AFMP and both groups of direct suppliers, not on a retailer-aligned pricing model, whereby it will pay farmers 5ppl on additional litres produced over and above 2012 monthly volumes, between 1 July 2013 and 31 December 2013. The 5ppl will be paid on a monthly basis. 

Commenting on the increase, Ash Amirahmadi, Arla’s vice president with responsibility for UK milk and member services, said: “As a farmer-owned cooperative, we are fully aware of the difficulties all our farmers have faced with increasing feed costs, coupled with lower production volumes. We have been able to make this announcement as result of support from our key customers.

“Our growth incentive is designed to ensure that farmers supplying Arla benefit from Arla’s growing milk demand and is a more sustainable way of sourcing our milk, than purchasing it from external suppliers.”