Arla to pay dairy farmers £31m
Dairy farmers across Shropshire are set to share in a £31 million payout after Arla Foods announced its end-of-year bonus.
The Lurpak butter and Castello cheese maker has confirmed what it will pay out to the 12,000 dairy farmers across Europe who own the company.
The payout will see 2,500 British owners share a total of £31 million. That includes 300 in the Midlands region including Shropshire.
The distribution will see £7 million invested in each farmer's savings account, which will build into a lump sum should they wish to leave the co-operative, with the remainder then divided up equally to give farmers almost £9,000 each from the bonus.
The company calls the sum the 13th payment – reflecting the fact that it comes as well as the 12 monthly payments received from the company during the course of the year.
Farmer owner and Arla Foods Board director Jonathan Ovens said: “The 13th payment is one of many important benefits for farmer owners like me and is particularly welcome as we begin to come out of a difficult year. It enables us to invest in our farms, and also save for the future.
“It’s an annual benefit and a return on my investment that I couldn’t achieve elsewhere.
"It’s good to work together with Arla to back British dairy farming. As we need to increase the country’s milk production to meet growing demand, it’s also reassuring that Arla promises to collect every drop of milk I produce at the Arla price.”
The bonus was agreed by the company’s Board of Representatives, which is almost wholly comprised of elected farmer owners and includes 20 British farmers. In 2017, this will increase to 23 British farmers, reflecting the increasing strength of British farming within the dairy cooperative.
Last month Arla, which has a major cheese packing plant at Oswestry, revealed that it grew group profits last year by 20.7 per cent to £300 million.
Revenue in the UK fell from £2.1 billion to £1.86 billion over the same period because of lower global market prices and poor exchange rates.
Europe contributed two thirds of Arla’s revenue in 2016, and the UK is the biggest market within Europe, contributing 25 per cent of group revenue.
Dairy farmers will welcome the windfall. While the farm gate milk price has stabilised in recent months, it comes on the back of a long period of rock bottom prices because of a surplus of milk in the global market.
