The on-account price for conventional milk will increase by 1.25 eurocents ($0.0141) per kilogram (1.01pence per kg), from September 1.
The company, which releases its half-year financial results on August 26, says that when applied to the UK standard liter for conventional milk, the increase equates to an upward movement of one pence, taking it to a price of 20.05 pence ($0.265).
Arla Foods amba board director, Jonathan Ovens, said he hoped that the news would restore farmers’ confidence in the dairy industry after 18 months of falling prices.
He added that commodity markets continue to strengthen, as indicated by the increase in the latest GDT auction.
This follows a significant downturn in milk production and increases in yellow cheese prices across Europe, while prices across European retail markets are also firming, Ovens said.
First Milk and Dairy Crest raise price
Arla held its milk price in August, while Dairy Crest and First Milk both hiked prices in the UK to reflect a more positive outlook.
Müller drew criticism from the National Farmers’ Union for not hiking its September price, but the company told DairyReporter that its prices were already competitive in spite of the lack of increase.