The basics of the milk price model

The way the milk price is calculated and paid out can vary. The merged company will have a milk price model based on the model known from Arla Foods today.

Arla Foods Milk price model

One of the fundamental principles at Arla Foods is that there is one milk price and that all farmer owners are paid for their milk according to a common settlement model. The prepaid price is paid two times a month.

On top of the prepaid milk price, there is a minimum supplementary payment of 1.5 EURc per kilogram of milk based on the full volume of milk delivered during the year. This follows the retainment policy covering the current strategy period in Arla as approved by the Board of Representatives.

In 2022 the supplementary payment was 2.2 EURc
In 2023 the supplementary payment was 2.1 EURc
In 2024 the supplementary payment was 2.2 EURc

After the two-year transition period all farmer owners will be paid using Arla Foods milk price model.

ARLA milk price model with the different components

Pre-paid milk price

+ Butterfat price (4,2%)
+ Protein price (3,4%)
- Deduction for milk collection costs

= raw milk value

+ Best quality
+ Non-GMO feed
+ FARMAHEAD™ CHECK
+ FARMAHEAD™ INCENTIVE
+ Maintenance cost & logistic supplement

=Pre-paid milk price (plus additions to farmers eligible for special milk deliveries)

Consolidation

ARLA Performance Price
+ Supplement payment
+ Retainment (individual and collective)