ARLA FOODS amba’s on account price for conventional milk will increase by one eurocent for March 2020 – which will lift its UK manufacturing price by 0.9 pence per litre to 30.94ppl. 
However, at the same time, the Arla on-account price for UK organic milk is to decrease by one eurocent, taking that down to 39.98ppl.
Arla board Director, and farmer owner, Arthur Fearnall, said: “Global milk production, having been stable through most of 2019, ended the year with most major exporting areas starting to show growth in production. Only in Oceania did volumes decline, due to hot and dry conditions particularly impacting New Zealand. 
"Commodity markets remain strong, though the recent trend of increasing protein prices and reducing fat prices continue, particularly in Europe," he explained. "Whilst the market fundamentals appear unchanged, the fear of reduced demand in Asia due to the Coronavirus has had a negative impact on global powder prices. Markets do not like uncertainty.”
UK agriculture director at Arla Foods, Graham Wilkinson, added: “UK organic milk production has remained strong but demand has weakened, resulting in an imbalance in the market. Whilst the reduction to our Organic price is unwelcome for our organic farmer owners, as a business it remains a strategic priority for us and is why we remain committed to continuing to fuel the growth of organic products and expanding our organic portfolio to offer consumers greater choice.”
Arla defines its UK manufacturing price on every other day collection from a top quality one million litre farm, on 4.2% butterfat, 3.4% protein, complying with the submission of Arlagården Plus data and Accessibility incentives. Arla farmers are paid on constituents via a manufacturing schedule. For ease of comparison, the liquid price for conventional is 29.75ppl and for organic 38.44ppl, based on 4% fat and 3.3% protein.
NFU Scotland welcomed the news, noting that it came at a time when there were 'pressures' in the world markets. Newly appointed union milk chair, and Arla producer, Gary Mitchell, said: “The current spring weather doesn’t bode well, but Arla producers can take some comfort from this increase in price.  
“However this announcement raises a number of issues. Some milk producers in Scotland are now receiving 20% more for their milk than their neighbouring farm and in general this calls into question the current state of the UK market as we know this price from Arla is a reflection on the pan-European markets.”