The Arla on-account price will reduce by 2.5 eurocents per kg, with effect from 5 January 2015.
The combined impact of the on-account price and 13th payment changes takes the quoted UK standard litre to 24.81ppl, a total decrease of 2.03ppl.
Commenting on the reduction, Ash Amirahmadi, Arla’s UK head of milk and member services, said: “Global supply and demand are still out of balance which is continuing to create downward pressure. The knock on impact of weak international prices on the European markets has affected Arla’s business performance, as well as that of the entire dairy industry in Europe.
“The weak, but positive result of the recent GDT auction is welcome, however it is too early to conclude that there is any change in underlying market conditions.”
Ends
Notes to editors
Arla amba milk price detail
The 2.5 eurocents reduction, when applied to the UK standard litre, will result in a decrease of 2.09 pence, taking the UK on-account price from 26.28ppl to 24.19ppl. This decrease includes a 0.08ppl negative impact from the quarterly exchange rate mechanism.
In January, the quoted 13th payment will be rebased to reflect the 2015 Arla amba forecast. The 13th payment continues to be based on the recently approved new retainment policy. This forecasted 13th payment is 0.62ppl, an increase of 0.06ppl, compared to the 2014-based estimate.
AMCo changes
The butterfat reconciliation has been reduced from 0.45ppl to 0.01ppl on all milk supplied with effect from 1 January 2015.
In addition, the Emerald Debt Co board has decided to implement a payment holiday of three months for 0.5ppl of the levy. If a member’s levy is currently 0.5ppl it will reduce to zero during the months of January, February and March 2015. For members whose levy is currently 1ppl, the loan will reduce to 0.5ppl during the months of January, February and March 2015. The levy will be re-introduced on 1 April 2015.