The cooperative has announced its on-account price for conventional and organic milk will increase by 0.5 Euro cent from March 2021 in light of mounting farmer pressures from rising farm input costs.
It will see manufacturing prices for conventional and organic milk increase to 30.03ppl and 38.39ppl respectively.
Earlier this month, Arla Foods announced it had seen ‘resilient results’ in 2020 as consumers turned to brands during the Covid-19 lockdown, with its total UK revenue increasing £2.12bn.
Alice Swift, UK agriculture director at Arla, said: “This rise comes as farmers are becoming increasingly pressured by the rising on farm costs they are facing for purchased feed, straw and fertiliser on the back of what has been a long wet winter.
“As a cooperative, ensuring the most value for our farmer owners for the milk they produce is crucial to our commercial decisions, and will continue to be our priority.”
Arla Foods amba board director, and farmer owner, Arthur Fearnall, added the current outlook remains stable with the ‘potential for positive development’.
«Global milk production is mixed with Europe and Oceania experiencing limited growth and both North and South American markets continue to grow strongly, however, this growth appears to be having little impact on global demand or prices,” Mr Fearnall said.
“Demand for commodity products remain strong, meaning that prices for all categories, whether cheese, powders or butter remain firm.
“Overall, demand continues to be stronger than expected and therefore market sentiment has remained positive.”