ARLA Foods UK plc has announced the second consecutive monthly rise in the milk price paid to members of its dedicated milk supply group, Arla Foods Milk Partnership (AFMP).
From July 1 the AFMP standard litre price increased by 0.3p per litre to 20.1ppl.
Arla Foods group director of milk procurement, Peter Walker, said that the increase was a direct response to the improvements in dairy commodity returns. He also revealed Arla Foods has suspended the balancing charge on excess litres from June 1.
Mr Walker said: “This is good news for our dairy farmers. We are giving them the green light to produce as much milk as they can for the next few months and assuring them that they will be well paid for doing it.
“Arla is paying the highest milk price, being the first UK milk buyer to break through the 20ppl barrier.
“We have always said that we will react quickly to changes in market returns and that is just what we have done.
“Our standard litre milk price is at the top end of industry returns. In addition, as a result of our relationship with Asda and Tesco, from August around 60% of our members will receive a significant further premium over the Arla base price.”
Jonathan Ovens, AFMP chairman, welcomed the increase as a “very positive response by Arla Foods UK plc to improvements in dairy commodity prices”.