Arla Foods has posted its best financial performance ever in a turbulent year for the global dairy market, delivering record profits to its farm owners.
The cooperative reports a competitive performance price of 56.4 euro cents per kilogram (48.5 pence/kg) in 2025, with the board proposing an additional payment of 2.2 euro cents per kilogram of milk delivered (1.9 pence/kg).
Group revenue reached a record €15.1bn (£12.99bn), supported by Arla’s record milk intake of 14.3bn kg and strong first-half commodity prices.
Net profit totaled €415m (£357m), reflecting what Arla described as a highly competitive full-year performance.
Chief Executive Peder Tabor called the results “historic” and said they showed “our strategy is working.”
“We have strengthened our market position, delivered record value to farm owners and taken an important step towards a more sustainable future,” he said.
The results came after a year of sharp fluctuations in the European dairy market.
The strong demand and balanced supply at the beginning of 2025 changed dramatically in the second half, when milk production surged due to favorable weather and good forage crops across Europe.
Arla’s key markets, including the UK and Denmark, saw a significant increase in milk supply, increasing by 7.7% and 3.6% respectively compared to 2024.
The sudden increase caused global traded prices to fall, resulting in a natural market correction and putting pressure on milk prices across the sector.
Arla Foods Chairman Jan Toft Norgaard said the cooperative had once again proven its resilience.
“We went from a milk shortage to a sudden abundant milk supply. This naturally creates pressure on the market,” he said.
“As farmers, it gives us confidence to see our cooperatives weather this volatile situation and once again prove their worth as a strong and competitive hub for our milk.”
Arla said its diversified operations helped ease the economic downturn.
Arla Foods Elements reported a 43.1% rise in revenue to €1.452 billion (£1.25 billion), driven by demand for value-added proteins and the integration of the whey nutrition business acquired from Volac.
Across the group, efficiency gains of €158m (£136m) helped stabilize the year-end market correction.
“It is in these volatile times that our strategy really comes into play,” Taborg said, describing the change as “a natural market cycle where increased milk production leads to lower prices across the dairy sector.”
Despite the economic downturn, Arla continues to invest heavily in its future growth, investing €731m (£629m) in 2025.
Key projects include the creation of the UHT Center of Excellence in Lockerbie, Scotland, and the major expansion of Holstebro Dairy in Denmark to increase cream cheese production by 16,000 tonnes.
In the UK, Arla recorded strong revenue growth despite weak brand volumes.
Net revenue increased by 5% to €152m (£130.1m), while branded volumes fell by 3.2% due to higher price levels at the start of the year.
Managing director Basu Padveli said 2025 was shaped by extreme commodity price volatility.
“The first few months were shaped by the highest commodity market prices we have ever seen,” he said.
“Then we saw the previously tight milk supply accelerate rapidly, leading to a rapid decline in commodity market prices.”
In terms of sustainability, Arla reduced its Scope 1 and 2 emissions by an additional 5.6 percent, reaching a cumulative reduction of 43.6 percent compared to the 2015 baseline.
Looking ahead, Arla expects the supply-driven market correction to continue into early 2026.
Group revenue in 2026 is expected to be in the range of €13.3bn to €14.1bn (£11.44bn to £12.13bn), with net profit share expected to remain within the target range of 2.8% to 3.2%.
“We enter 2026 well-prepared for future market conditions,” Tuborg said.
After a record year, 2026 will test just how resilient that performance really is.
