Arla plans to pay out its 2018 profits to its farmers
Posted on: 04/09/18
In a welcome, if not surprise, move Arla has confirmed it proposes to pay its entire 2018 profits to its farmers recognising many face serious financial pain as a result of the drought. The proposal will be put to the Arla Board of Representatives at its October meeting.
If Arla’s nett profit target of 2.8% to 3.2% of revenue is achieved the numbers indicate a potential supplementary payment of circa £20,000 for a 1 million litre producer, however, this needs to be split into a circa £9000 as a 13th payment producers are already entitled to receive so the additional money paid out will be around £11,000 per farmer.
The total payment will likely be approved in February 2019 when Arla’s end of year results are known.
It’s highly likely this proposal has been instigated by the Danish and Swedish Arla farmers who have both clout and face some serious financial additional costs as a result of the drought.
The point to ponder is whether Arla executives are now assuming (possibly planning) that on October 1st, November 1st and December 1st it will be a farm gate milk price hold stand on with little, if any, chance of further farm gate milk prices increases