Arla and Leerdammer keep milk price stable

Arla reports that it is leaving the milk price for July unchanged, with an adjustment for the changed exchange rate ratios. As a result, the milk price in the Netherlands drops by about 10 cents, it was reported.

Changes under the hood
However, quite a bit changes under the hood. As of July, Arla has clearly reduced both the fat and protein prices, as can also be seen in de Boerenbusiness milk price comparator. This has to do with a changed milk price structure from the third quarter of this year and the introduction of a sustainability surcharge. In the Netherlands this amounts to an average of €1,44 per 100 kilos, in Belgium an average of €1,48 per 100 liters.

This surcharge is 'woven' into the milk money building by Arla with the exchange closed. To achieve this, it was necessary to reduce the basic price by the same amount as mentioned above. The side effect of this is that the surcharge for the best quality also decreases, because it is a derivative of the basic price.

Arla's total milk price remains the same as of July, but an increasing part of it must be earned through extra efforts. This is somewhat similar to the adjustments that FrieslandCampina made to the Focus Planet system at the beginning of 2023, but at first glance this means that farmers can receive a higher total compensation.

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No such changes at Lactalis Leerdammer for the time being. However, the loss of the Vlog allowances is expected later this fall. It is not yet clear whether and how this will be compensated.