Arla is to increase its milk price by 0.38p a litre at the start of next month.
The European farmers’ co-operative, which buys milk from one in four UK dairy farmers, will increase its liquid price to 27.45p a litre and its manufacturing price to 28.55p a litre on March 1.
The dairy, which produces Anchor, Cravendale and Lurpak, said this was its seventh consecutive price rise.
The co-op’s farmer board director, Jonathan Ovens, said: “Milk production in the EU is picking up in line with seasonal trends, although it is still significantly below 2016 volume.
“Milk production in Oceania and South America continues to decline but milk intake in the US is growing by around 2%. Markets appear to be stable with continuing good demand, particularly in Asia.”
Meanwhile, the latest accounts for Arla reveal a boost in profits against a drop in turnover.
Group net profit was up 20.7% to 356million euros (£301million), while turnover was down 6.8% to 9.57billion euros (£8.1billion).
The company said it had performed strongly and increased its market share in the UK, which is its largest market, despite a drop in UK sales to 2.2billion euros (£1.86billion) from 2.5billion (£2.11billion) previously.
Tomas Pietrangeli, who manages the company’s UK business, said: “In a year of continuing changes in the grocery market as well as political uncertainty, we were able to deliver a strong set of results by driving growth in the UK through our portfolio of popular products, and delivering efficiencies and cost savings in our supply chain8.
“We maintained our commitment to innovation with a number of new and exciting product launches which achieved listings and consumer impact early on, and are performing well.
“Despite these exciting developments we are, however, conscious of the longer-term context and potential impact of Brexit. That’s why we’re working closely with the wider food and farming industry, and with Government, to try and maximise opportunities of Brexit, whilst mitigating potential risks.”
