Arla has implemented a 2p per litre cut to its farmers’ milk price - the biggest cut of the three major processors in the latest round of price-cutting.

In a letter dated yesterday (2 July), Arla informed those farmers in its Arla Foods Milk Partnership the cut would take effect from 1 August. It will mean that those farmers not aligned to a retailer supply contract will see their price fall to 25ppl.

“Following our communication in May, business performance has continued to suffer, primarily as a result of the ongoing impact of depressed commodity prices,” the letter stated.

Where possible, Arla had sought to address its business performance internally through a reduction in headcount and marketing spend, the letter added. It was also in continuing dialogue with customers with a view to recovering more money.

“However, net of all these activities, there remains a requirement to reduce the price paid for milk supplied by AFMP members and all other suppliers.”

News of the Arla price cut follows a 1.7ppl cut announced by Robert Wiseman Dairies on Friday and a 1.65ppl cut announced by dairy Crest this morning.