Arla Foods UK plc has announced the second consecutive monthly rise in the milk price paid to members of its dedicated milk supply group, Arla Foods Milk Partnership (AFMP). From 1 July 2007 the AFMP standard litre price will increase by 0.3p per litre to 20.1ppl.
Arla Foods Group Director of Milk Procurement, Peter Walker, said that the increase was a direct response to the improvements in dairy commodity returns. He also revealed that Arla Foods has suspended the balancing charge on excess litres from 1 June - an arrangement he hopes will stay in place until the end of 2007.
"This is good news for our dairy farmers. We are giving them the green light to produce as much milk as they can for the next few months and assuring them that they will be well paid for doing it," said Mr Walker.
"Arla is paying the highest milk price, being the first UK milk buyer to break through the 20ppl barrier. We have always said that we will react quickly to changes in market returns and that is just what we have done," said Mr Walker.
"Our standard litre milk price is at the top end of industry returns. In addition, as a result of our relationship with Asda and Tesco, from July around 60 per cent of our members will receive a significant further premium over the Arla base price."
Jonathan Ovens, AFMP Chairman welcomed the increase as a "very positive response by Arla Foods UK plc to improvements in dairy commodity prices".
"We have always impressed on Arla Foods that our members would want to see commodity price improvement reflected in the farm-gate return with minimum delay and I am delighted they have done that."