At Arla, our farmers are the beating heart of our business. One in four British dairy farmers, totalling 3,000, co-own our business - and as farmer-owners our success is their success, with 100% of profits paid back to them.
It is no secret that dairy farmers in the UK and elsewhere are under pressure. Global supply of dairy products has been growing at a faster rate than global demand, and this has led to a decline in farmgate prices.
Two key global markets - China and Russia, which together account for nearly 30% of globally traded dairy products - have recently affected demand. Russia had traditionally has been one of the world’s biggest cheese importers, but it embargoed products from the EU in August. Chinese demand for dairy is still growing, but it has slowed on the back of rising retail prices in the last upward cycle. Because the dairy industry is increasingly globalised, this leads to a domino effect on prices and farmers are feeling the impact of this volatility and uncertainty.
“By buying our dairy products, consumers can help our farmers”
Against this backdrop, we are proud that Arla consistently has delivered a market-leading price for its farmer owners. To allow us to maintain this position, Arla has launched the ‘Support our Farmers’ initiative. We believe the campaign is the first of its kind and, in keeping with our co-operative ethos, it is being driven by our farmer owners.
Thousands have already been out in their local communities spreading the word and delivering leaflets, all supported on a national level by press advertising and a social media campaign.
Crucially, the campaign answers the question we at Arla are often asked by consumers - what can we do to support British farmers directly? Our answer is clear. By buying our leading dairy products including Anchor, Cravendale and Lurpak, consumers can help our farmers - because as a co-operative, 100% of our profits are paid back to them, with no middle men to cream off the profits.
In both the short and medium term, we believe consumers can help farmers achieve a better price for their milk.
As a farmer-owned business, we take a long-term view and understand the importance of building partnerships with our customers. Our farmers have demonstrated their commitment to the UK dairy industry by investing more than £500m in building a supply chain that can compete on a global scale for innovation, product quality and efficiency. The most obvious example of this is our new dairy in Aylesbury.
It is also heartening to note that Arla recruited 300 dairy farmers to our co-operative this year, with 10% of those being completely new entrants to dairy. To my mind, that’s an extremely strong vote of confidence in the long-term sustainability of the industry.
Arla’s aims are the same as those of our farmer owners: to get the best price possible for the milk we produce.
We are committed to achieving this in the short, medium and long term. In the short and medium term, consumers can also do their bit by ‘Supporting our Farmers.’
Peter Giørtz Carlsen is executive vice president at Arla Foods UK