Arla Foods announced a one eurocent increase on the milk price last week which has now been confirmed as a 0.74ppl increase.

The increased milk price will be introduced on 3 February 2014 and take the milk price for the 2,800 British owners of Arla Foods amba to 35.01ppl.

This increase is due to the continued strengthening of the performance of the business over the past month. They also predict that market conditions will remain stable over the coming months.

Ash Amirahmadi, head of milk and member services, at Arla Foods, said: "This is a great start to the year for our 2,800 British owners and will put us in a good place to secure the further 300 million litres of owner milk that we are looking to recruit."

NFU chief dairy adviser, Rob Newbery, said: "Arla's recently announced price increase will be excellent news for their member suppliers. It is important that Arla continue to use their strong position in domestic and global markets to return prices to dairy farmers, that allows for investment in the future of their businesses."

How the milk price is made up:
  • On-account price of 34.25ppl
  • Plus a forecasted 13th payment

All milk supplied in 2014 will be eligible for the 13th payment and this will be paid in March 2015.

The 13th payment will be reforecast every month and is based on the global Arla Foods amba formulaic pricing mechanism, agreed with the elected farmer representatives.

The principle of the formula is the higher the on-account milk price, the lower the 13th payment; the lower the on-account milk price, the higher the 13th payment.

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