The information is from the UK Milk Development Council's (MDC). The findings, sourced from the Dutch Farmers' Union (LTO), highlight the increasing cost pressures on the region's leading processors as supply is tight and demand is high.

Of all the groups affected, French giant Danone was strongest hit by the increases, paying on average €5.09 more per kg than in the previous year, the MDC stated. Finnish group Hameenlinnan and Germany's Nordmilch also faced strong hike in prices of €2.56 per 100kg and €4.75 per 100kg respectively.

While the increases were felt Europe-wide, UK based groups like Arla Food's British arm and First Milk continued to fare better than continental competitors, posting decreases in their farm gate milk payments, the report stated.

MDC said that Arla paid €28.10 per 100kg on average for the year, €2.56 per 100kg less than 2006. First Milk cut its farmgate payments by €4.75 per 100kg to 25.91 per 100kg.

Despite the higher costs facing European processors, the LTO's figures suggested that rival international markets have been even more responsive to the changes in milk commodity prices.

Source: foodproductiondaily.com