NFU calls on Arla to deliver on volatility plans as milk price drops sharply

The NFU is urging Arla to speed up its commitments to looking at risk management options for its suppliers. The NFU is also calling on Arla to be clear as to why its current plans are not preventing steep price drops.

This call to action comes today as Arla announced it will be dropping its UK milk price by 2.16ppl – since December, Arla farmers have seen a total drop of 5.19ppl.

NFU dairy board chairman Michael Oakes says: “I’m disappointed and surprised to see this level of price drop again despite a stable demand for butter and the UK Futures Market Equivalent showing a positive result on the forward curve.

“We will soon see Arla’s seasonality pricing mechanism lower the pence per litre received even more.

“Just this week at the NFU Conference Arla announced a growth in revenue of £1.94bn. Arla farmers don’t appear to be feeling the positive effects of this revenue or the strategy to manage risk in the market. We want to see more done at both ends of the chain to insulate farmers from such steep price drops.

“It is vital that Arla works with farmers to provide them with the ability to mitigate the effects of volatility on their businesses. We are holding Arla UK’s managing director Tomas Pietrangeli to his commitment made at NFU Conference to look into risk management options for Arla suppliers. We are calling on Arla to speed up this work so farmers can see the results.”

The NFU Dairy Board is due to meet with Arla later in the year and will be reinforcing this call.

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About The Author

John Swire - Deputy editor of Agronomist and Arable Farmer as well as responsibility for the Agronomist and Arable Farmer and Farm Business websites. After 17 years milking cows on the family farm John started writing about agriculture in 1998 and has since written for a variety of publications and has developed a wide circle of contacts within the industry. When not working John is a season ticket holder at Stoke City and also of late has become a fitness freak, listing cycling, swimming and walking as his exercises of choice. Colin Ley - News reporter