Arla takes measures to help milk price

Arla brilliantly smashes the previous record amount invested in processing. In 2014 the amount came to 293 million euros, in 2017 the amount will be increased to 335 million euros. This is in an attempt to move more milk away from bulk products and to brands, so that the milk price becomes more resilient.  

During the last two years, Arla could not prevent lower prices on the world market from translating into a lower milk price. In 2017, action will be taken in an effort to move more milk away from the large commodities, whose prices are often determined by the global market, and to move to branded and foodservice products.

The majority of the money will be deployed in key markets of Germany, the United Kingdom, Denmark, Sweden, the Netherlands and Finland. Money also goes to processing aimed at high-margin products destined for emerging markets.  

The dairy company invests roughly 18 million euros in the processing of products for the food service. An important part of the so-called 2020 strategy. One of those investments amounts to 13 million euros in the Danish producer of mozzarella. On the one hand, it provides an improvement in quality and on the other hand, the processing capacity can be increased.  

However, the largest amount goes to the Danish protein producer, responsible for the production of lactose and other high-quality whey ingredients. More generally, 22 million euros will be invested in all locations. This is to further optimize processing.   

Arla has the advantage here that due to its wide spread, it is hardly hindered by developments at country level. Only Brexit remains a topic of attention. However, this cannot be said of FrieslandCampina, which, due to its focus on the Netherlands, has to deal with all the developments surrounding phosphate production and derogation. As a result, the company cannot focus purely and solely on the valorisation of milk. Something that Arla can do to a much greater extent.  

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