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Food-Profits from Milk for Foreign Company

Arla announces £250m profit in 2013

19 February 2014 | By Alistair Driver

alt

 

At present Farmers are receiving approx 72.5p for 4 pints of whole milk

 Asda charge £1 for 4 pints -others charge more.

That is winter produced milk – Summer produced milk pays less

 

 

But remember that is for whole milk. ( 3.4% Butterfat)

They charge the same for milk that has had the cream removed-

ie Semi Skimmed or Skimmed Milk

 

Radical

 

ARLA Foods has confirmed its position as one of growing forces in global milk production by announcing a profit of £250

million in 2013.

The Danish co-operative’s 2013 results, published on Wednesday, showed a 2013 Performance Price of 33.91 pence per kilo,

compared with 30.21p/kg in 2012.

Given current market conditions, the company said it expected this to increase again in 2014 to between 36.1p/kg and

37.3p/kg in 2014, reflecting the current higher and, for now, stable milk price.

The Performance Price indicates how much value Arla has been able to generate from each kilo of milk supplied by its

cooperative owners in Sweden, Denmark, Germany, UK, Belgium and Luxembourg throughout the year, including money

reinvested into the business. It is therefore slightly higher than the milk price, which today Arla is quoting at 35.01 in the UK,

which includes the ‘13th payment’ at the end of the year.

The 2013 figures show the total volume of milk produced by Arla’s owners increased from 7.5 billion kg in 2012 to 9.5bn kg last year.

Arla’s total revenue rose by over £1.1bn to £8.4bn, a 16.6 per cent increase. The company’s net profit, the planned three per

cent of revenue, equated to £250m, compared with £207m in 2012.

The company attributed its improved performance to strong European business, following key mergers in 2012, and rapid

growth in markets outside the EU, such as Russia, China, the Middle East and Africa, all on the back of a higher global milk

price, as demand for milk products outstripped supply of milk.

Arla Foods’ CEO Peder Tuborgh said: “Milk has become a more valuable commodity globally, and that naturally has a

positive effect on our results.

“Our main focus is to create the best possible milk price for our owners, and the 2013 results confirm that we have the right

strategy to achieve this.”

Arla in the UK

In the UK, revenue rose 22 per cent to £2.2bn, primarily due to the 2012 Milk Link merger, which made Arla the largest dairy

company in the country with leading positions in milk, cheese, butter and spreads.

The number of its British farmer owners increased to around 2,800, after Arla Foods Milk Partnership (AFMP) farmers agreed

to become co-owners of Arla Foods amba and it is looking to recruit more UK farmers to help deliver its growth plans.

From April 2014, the business will supply 30,000 tonnes of cheddar to Asda, increasing cheese production by 50 per cent. It

has also signed a partnership with Starbucks to supply 30 million litres of Cravendale to all its stores in the UK and

Northern Ireland. Central to expanding UK production will be ‘ramping up’ production at Arla’s new fresh milk dairy in

Aylesbury, near London. 

Arla Foods UK, Peter Lauritzen said: “The UK business is performing well. Arla UK has a compelling dairy offer and we are

very much focused on growing our business and building on our No 1 position in fresh milk, butter and spreads as well as

cheese.”

The UK remains Arla’s biggest market followed by Sweden and Germany, with Denmark, which still supplies the most milk

to Arla, now its fourth biggest market.

In 2014, Arla expects revenue to reach £8.7bn and a net profit of £265 million but with the ‘ambition’ of a Performance Price

that could top 37p/kg. (Not the Price Farmers Receive – About 32ppl} Radical

Mr Tuborgh said the company expected a higher performance price for the year 2014 than 2013 as the business continues to

grow in and outside Europe.

 But he said: “We are off to a good start in 2014, but we are well aware that a lot of milk is being produced in the world at the

moment which may put pressure on prices late in the year.”

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