Arla Foods has confirmed its May milk price, which will see prices for conventional milk unchanged for next month.
Although Arla is decreasing its on-account price for conventional milk by one euro cent per kilogramme from 1 May 2017, the UKAF board has taken the decision to maintain the conventional price in the UK at 28.13 pence per litre.
Commenting on the UKAF Board’s decision, Jonathan Ovens, Arla Foods amba board director said: “The one eurocent Arla Foods amba reduction has been fully reflected in UKAF’s cash flow.
“However, to avoid the unintended consequence of a double on-farm impact of a milk price reduction at the same time as maximum seasonality deductions, the board has adopted a pragmatic and prudent approach to use expected future benefits from the currency exchange mechanism to balance the milk price throughout May.
“Over the calendar year of 2017, and in accordance with Arla's farmer-owned principles, the cash flow will be balanced and money in will equal money paid out. The UKAF board will continue to carefully monitor the cash flow and ensure that the integrity of the Arla Foods amba payment model is protected.”
Arla Foods is transitioning to a manufacturing schedule only with effect from 1 January 2018, where Arla farmers will be paid on constituents. For ease of comparison, the liquid price is 27.03 pence, based on 4% fat and 3.3% protein.
