News Insights
Mixed first half-year for dairy giant Arla
Dairy giant Arla has had a mixed first half of 2024. The advance price paid to members was higher than in the first half of 2023. The profit was also higher. Meanwhile, the performance price was lower, while the turnover was half a billion lower than in the first half of 2023.
For the second half of the current year, Arla is optimistic but also cautious. The demand for dairy products is increasing, while availability is lower. This should result in higher milk prices, but it remains to be seen whether consumers will accept the higher prices for milk, yogurts, cheese, and butter.
For Arla members, it was good to see that the advance price in the first half of 2024 increased by more than €5.00 per 100 kilos to €45.00 (the price was €39.90). However, turnover decreased from €7.1 billion a year earlier to €6.6 billion in the first half of 2024. On the other hand, profit increased from €103 million to €167 million.
Possibly, Arla's higher profit is partly due to the increased sales of branded products. Last year, sales of branded dairy products declined sharply, but in the first half of this year, Arla recorded a 4.1% growth. In addition, generally higher dairy prices also helped increase turnover.
Milk supply remained at 7 billion kilos in the first months of this year, the same as in the first half of 2023. Arla members made efforts to produce milk more sustainably, not least because it simply brings in extra money. The average sustainability score increased from 49 points last year to 53 points by the end of June. Dutch Arla members earn an average of €2.00 extra milk money per 100 kilos in August.
