Inside Milk
Uncertainty affects milk price Arla
The dry conditions present major challenges for dairy farmers in, among others, the United Kingdom (UK). However, it is not enough for Arla to say with certainty that less milk is being produced in Europe. This has an effect on the milk price for September.
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Arla keeps the milk price stable in September. It means the end of the upward trend that started in May. For Dutch dairy farmers, this means that the milk price, with an annual supply of 600.000 kilos of milk, remains around €32,83 per 100 kilos (at 4,41% fat and 3,47% protein).
Mixed feelings
The milk price decision gives rise to mixed feelings. This is partly because Arla is active in the UK, Denmark and Germany as well as in the Netherlands. These are the areas where the long period dry and warm weather has caused a lot of local damage.
"There is no doubt that the weather is causing challenges for farmers. At the same time, the impact on the milk pool in the European Union (EU) is limited," said Johnnie Russell of the British part of Arla. "There is uncertainty in the market about the effect of the drought on milk supply for the rest of the year."
Another development is the brexit, the impact of which Arla will immediately feel. The cooperative therefore warns that when the borders close, there will be less choice (at higher prices) for British consumers. This mainly concerns cheese, butter and yoghurt.
Premium
At Arla, dairy farmers can earn a grazing premium of €0,50 per 100 kilos. €1 extra is paid for GMO-free milk and a €1 bonus can also be earned. By 2020, Arla hopes that the milk pool will consist of 20% organic milk.
The increase in Arla's milk price comes to a halt.