Arla Foods’ Board of Directors has approved the Group’s annual budget for 2003/04.
Arla’s earnings per kg milk supplied by co-operative members is set at 240.98 Danish øre per kg milk and 293.88 Swedish øre per kg milk.
This corresponds to a fall of 12.3 Danish øre in Denmark and 14.5 Swedish øre in Sweden compared to the expectations for 2002/03.
“The budget reflects the negative development in international trends and market conditions which set in during the past financial year,” says Arla Foods’ Chairman Knud Erik Jensen.
Arla Foods' Chairman
Knud Erik Jensen
“This is particularly the case with regard to bulk product prices for butter, cheese and skimmed milk powder and the falling foreign exchange rates which have impacted on the entire European dairy sector.”
Knud Erik Jensen also pointed to the EU’s agricultural reform whose initial phase will have substantial negative consequences for milk producers.
Individual producers, however, should see the budget within the context of the expected compensation from the EU of 6-9 øre. Details of distribution and payment have yet to be determined.
A cut in the production levy to the Danish Dairy Board of 1 øre per kg is also in the pipeline.
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