Continued high milk supply and ample raw material availability are putting pressure on prices for both conventional and organic milk.
Arla will reduce the milk price for both conventional and organic milk from January 2026. For conventional milk, the price will be cut by DKK 0.298 per kilo, while the organic milk price in Denmark and Sweden will be reduced by the same amount. The adjustment is based on continued high milk supply and a market characterised by ample raw material availability.
For conventional milk, the price adjustment means that Arla’s advance milk price from January 2026 will amount to DKK 3.021 per kilo. The price is calculated for milk of the highest quality, based on Non-GM feed, and includes the FarmAhead Check, the FarmAhead premium, as well as supplements for maintenance and logistics.
The organic milk price will likewise be reduced by DKK 0.298 per kilo from 1 January 2026. As a result, the advance price for organic milk of the highest quality will stand at DKK 4.413 per kilo in Denmark and Sweden. In Central Europe and the UK, the organic milk price remains unchanged.
In addition to the price cut itself, the advance price is affected by updated settlement parameters for 2026, which in total reduce the price by approximately DKK 0.005 per kilo. The quarterly currency adjustment moves in the opposite direction, providing a small positive effect of DKK 0.001 per kilo.
High milk production puts pressure on the market
According to Arla, the price development is driven by continued high milk production—both globally and within the EU—combined with stable retail sales. At the same time, market prices have been adjusted downwards due to generally ample milk availability.
For organic milk, Arla points out that the market balance in Denmark and Sweden is particularly sensitive to changes in supply and demand. This affects the costs of downgrading organic milk, and the outlook is assessed as uncertain.
Market overview: pressure on fat and butter
Arla’s market update shows that milk production in Europe and the UK rose significantly in October, up 5.4% compared with the same period last year. Combined with higher fat and protein content, this resulted in a 6.1% increase in energy-corrected production. New Zealand has also seen growth in milk solids production.
On the product side, butter markets remain under pressure with declining prices, while milk powder prices have fallen—particularly for whole milk powder. The cheese market has so far been more stable, partly due to large export volumes, which have led to delays in EU orders.
Arla refers its farmer owners to Arla Farmers for further details on the updated settlement parameters for 2026.
By Maja Løvstrup
