ARLA has slashed 1.2ppl off its UK farmgate price and says the Russian import ban on western products was partly behind the move.
Arla Foods also announced that its owner on-account price would fall by 1.5 euro cents per kg with effect from September 1. When converted, this equates to the 1.2ppl drop seen for UK farmers and means the standard price is 30.38ppl.
Ash Amirahmadi, Arla UK head of milk and member services, said: “Global commodity markets have fallen sharply over recent months, a development that has affected dairy companies, including Arla. In addition, Russia has announced a ban on agricultural imports from other states, including the EU.
“The ban has affected Arla Foods’ exports – we are now unable to export products to Russia.
“This further reduction in Arla’s global milk price is necessary due to a continued downward movement in global and European prices, made worse by the Russian ban.”
Arla is the first dairy company to openly cite the trade sanctions imposed by Russian president Vladimir Putin as having a direct impact on trade and price.
The latest cut follows July’s 0.94ppl reduction, when Arla blamed the ongoing downward movement in Europe.