Inside Milk
No third reduction in a row for milk price Arla
The positive developments in the dairy market are also reflected in Arla's milk price. Where does the price come in?
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Arla's milk price is normally one of the first to be published, making it a trendsetter in Europe. In December and January Arla applied a correction, as a result of which the milk price in 2 months on balance increased from €1,20 to €34,51 per 100 kilos of milk (at 4,41% fat, 3,47% protein and an annual supply of 800.000 kilos). Arla will leave the milk price at this level for February.
In practice, the advance milk price is usually higher, because Arla also earns premiums by participating in the 'Arla Garden Plus' programme, VLOG-milk (GMO-free milk) and grazing (€0,50 per 100 kilos).
Consequence of the drought
The bottom below Arla's milk price is in line with the movement in the dairy market. especially it milk protein is clearly more valuable than a few months ago, while butter and cheese prices are largely stable.
According to Arla's director Johny Russel, the impact of the dry summer is increasingly apparent in European milk supply; this also explains the improved sentiment in the dairy market, he says. Arla's move increases the chance that FrieslandCampina's guaranteed price will also remain the same in the coming month, since it is partly based on this.
Click here to view the milk price comparison.