ARLA FOODS has confirmed that its on-account farmgate prices for conventional and organic milk are to decrease by 1 eurocent for May 2020.

When applied to the UK manufacturing price, this amounts to a 0.9 pence per litre reduction for its producers, bringing conventional milk to 29.89ppl and organic milk to 38.93ppl, from May 1.

Arla Foods amba board director, and farmer owner, Arthur Fearnall, said: “Because of the COVID-19 pandemic and the actions taken by governments to limit its spread, the dairy market has moved into unprecedented territory. Despite some short-term increase in retail sales, the closure of many foodservice businesses, alongside the Spring peak in milk production and the uncertain global economic outlook, has caused significant reductions in commodity market prices across all categories in the space of a few weeks. Due to the continuing impact of the current situation, the outlook remains uncertain.”

Agriculture director at Arla Foods UK, Graham Wilkinson added: “The impacts of Coronavirus have been felt right across the dairy industry, not just in the UK but around the world. As a cooperative owned by dairy farmers, Arla is not immune from these developments and we are working hard to manage the significant fluctuations in demand and the challenges this brings. Following the announcement from the government to temporarily relax competition rules, we welcome the opportunity for the industry to be able to work more closely together at this time to build more robust plans to navigate through this crisis.”

NFU Scotland’s Milk Committee chairman Gary Mitchell, an Arla supplier who farms near Stranraer, said: “While a price cut is always disappointing, this is not unexpected news.

“This move emphasises that the coronavirus is just not affecting farmers in the UK but also further afield. It is important though at this time that we all focus on the future and how we get ourselves out of this situation as quickly as possible.

“It was encouraging to hear UK Government last week relaxing competition laws around the industry," said Mr Mitchell. "This will hopefully open up some of the blockages in the supply chain and get all milk and dairy back in front of all UK consumers.

“We would stress again to all retailers that they can help us by playing their part in ensuring all supermarket shelves are full of liquid milk and other dairy products and end as quickly as possible any restrictions placed at point of sale. That will help ensure the primary producer receives a return that will keep dairy flowing.”