GB’s two largest dairy co-ops lose £100m in a year

Published 4 November 15

First Milk (FM) and Arla Foods UK lost £100m between them last year, according to their latest set of accounts. FM’s loss of £24m equates to 2.2ppl if split across its farmer owners, while Arla UK’s loss of £83m would be equivalent to around 2.6ppl for Arla UK milk suppliers.

FM put its losses down to an over-exposure to poor returning markets. Its position was exacerbated by increased milk production and the loss of a material customer contract.

Arla UK’s biggest cost of production will be the milk price paid to its farmer owners in the UK. This price is set by its parent company Arla Foods amba, based on the financial performance of the whole group. For its UK farmer owners, this is converted into Sterling using a 24-month rolling exchange rate. The UK accounts suggest the price paid to Arla farmers in the UK has exceeded the milk value generated by the company within the UK.