ARLA FOODS’ on-account milk prices are dropping from July 1.

Arla's farmgate price for conventional milk will go down by 0.75 euro cents per kilo, while the organic milk price will decrease by 1.5euro cent per kilo, although the figures will be positively impacted by the co-op's quarterly currency adjustment.

When applied to the manufacturing price, Arla’s per litre price for conventional milk will be 29.26 pence, and its organic price will be 37.62 ppl for farmer owners who have completed their Arlagarden and Climate Check data.

Arla Foods amba board director, and farmer owner, Arthur Fearnall, said: “After recovering from the low prices of March and April, commodity prices have started to stabilise in the last few weeks but at levels still below the pre-Covid-19 period. Demand remains uncertain as countries begin to open up but with differing levels of restrictions still in place.

"Lower prices and uncertainty continue to impact the market. The UK organic market is seeing an imbalance between supply and demand in addition to Covid-19 uncertainties which is acting negatively on that market. Other organic markets remain stable, though subject to the same uncertainties from Covid-19 as the rest of the dairy market. The current outlook overall is looking stable.”

UK Agriculture director Graham Wilkinson added: “Despite significant redeployment measures and the start-up of the foodservice sector our organic demand continues to be dis-proportionally impacted by the Covid-19 disruption. Therefore regrettably we need to reflect the lower returns in our organic milk price whilst continuing to work with our customers to try and minimise the Covid-19 impact.”