Inside: Dairy Market
Arla strengthens base below the milk price
Arla announces it is strengthening its base below the milk price through a new cost-saving program. The plan, called Calcium, should free up €300 million to be paid to dairy farmers through the milk price. Something that is necessary because of Brexit.
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There are 2 developments in the dairy firmament that are worrying the Scandinavian dairy farmer. The first is the Proposed referendum on United Kingdom membership of the European Union and the currency fluctuations that this entails. Today, the dairy farmer is already experiencing inconvenience from currency fluctuations. The other development is the trend that fat and protein are becoming less valuable, which does not match international expectations.
Free up more money
Calcium must limit the negative effects of these developments. Although plans to streamline the company have been underway for some time, ambitions have increased in recent months. The aim is, on the one hand, to improve the income of dairy farmers and to continue to compete with the milk price. On the other hand, efforts are being made to invest more money in the components that drive sales growth.
By the end of 2020, Arla hopes to have achieved savings of €400 million through these plans. It is expected that €2020 million of this can be distributed among dairy farmers by 300. through the milk price.
Effects still unknown
Arla cannot yet say what consequences the program will have for the various parts of Arla and its employees. "It's still too early." What the cooperative does make known is that the involvement among the employees is high and it motivates the employees extra to achieve the highest results for the dairy farmers," says Peder Tuborgh, CEO of Arla.
Click milk prices from other processors.
