Dairy cooperative almost doubles farmer owner numbers

By Rod Addy contact

- Last updated on GMT

Arla Foods aims to further strengthen sustainable, farmer owned milk supplies
Arla Foods aims to further strengthen sustainable, farmer owned milk supplies

Related tags: Arla foods, Milk

Arla Foods aims to strengthen sustainable supplies by adding 300M litres of owner milk to its supply chain this year and has almost doubled the number of its British farmer owners.

The dairy cooperative announced this morning that it had added a further 1,300 farmer owners, taking the total to 2,800.

That followed plans first announced in September last year​ to offer all Arla Foods’s farmer suppliers the chance to become co-owners in the business.

Had all of them agreed, that would have boosted numbers to 3,200, but a spokeswoman for Arla UK said for various reasons some had elected not to take up the offer.

‘Not going to be right for everybody’

“We knew it wasn’t going to be right for everybody,”​ she told FoodManufacture.co.uk.

Nevertheless, the announcement means farmer owners supply 95% of Arla UK’s milk pool and are part of the European network of 13,500 farmer owners across Denmark, Germany, the UK, Belgium, Luxembourg and Sweden.

The development means Milk Partnership Limited, now Arla Milk Cooperative (AMCo), has become a co-owner of Arla Foods.

“We have been working towards becoming co-owners of Arla Foods for the past 10 years and we have now realised our vision," said Jonathan Ovens, AMCo chairman and British farmer director of Arla Foods.

“Arla is committed to delivering a sustainable future for its farmers and by taking the ownership route, we are receiving the leading UK milk price.”

‘Huge upsurge in European milk production’

Johnnie Russell, AML chairman and British farmer director of Arla Foods, said: “The price a farmer receives for his milk today is crucial, however, with quota abolition next year, which is likely to result in a huge upsurge in European milk production, it is essential that a farmer is able to benefit from the returns from world markets.

“I believe that Arla is the only UK business that has a  strategy in place whereby we can access world markets to tap into a broader marketplace for our products, which in turn deliver a higher return. The inclusion of Westbury skimmed milk powder on the GDT​ [GlobalDairyTrade] auction is just one example of this.”

Ash Amirahmadi, head of milk and member services, at Arla Foods, said: “One of the key strategic objectives of ​[the] roadmap was to secure our milk supply and we have achieved this objective.  

“Not only have we seen 85% of AFMP ​[Arla Foods Milk Partnership] members sign up to become owners of the European dairy cooperative, we have also recruited a further 230M litres of new milk into the cooperative as a result of the initiative.

‘Positive step’

“This is a hugely positive step and reflects the strength of the Arla Foods offering.”

Arla is looking to further expand its UK milk pool and, as a result, the Arla Foods farmer board has agreed to re-open recruitment to secure a further 300M litres of milk in 2014, in addition to the 3bn litres already supplied by UK farmer owners.

Dairy farmers welcomed the move. Mansel Raymond, chairman of the National Farmers Union’s dairy board, said: “For years UK farmers have looked on enviously at the apparent disparity between this country and mainland European milk prices.

“It’s good news that Arla has reopened its recruitment window so that British dairy farmers who wish to join Europe’s largest dairy co-operative will have the opportunity to be part of this successful business.”

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