Butter could cost more by Christmas, says Arla, will close Denmark facility
"The first sign we will see of it, is that the price of butter rises very sharply," Peder Tuborgh, chief executive of the farmer-owned firm told the BBC.
There was insufficient milk being supplied by farmers to make the products, he said.
Tuborgh said the milk shortage had come about because producers "put the brakes on" in 2016, in the wake of previous overproduction of milk and consequently lower prices.
He said consumers would feel the impact across Europe in the coming months, suggesting that price rises would differ between European nations.
However, the Arla boss did not want to predict how much butter would cost later this year.
"At the moment, we are trying to get as much butter and cream out of our producers," he said.
It comes as global butter prices have hit an all-time high, according to the UN Food and Agriculture Organisation (FAO).
After thorough analysis, Arla has decided to move production of white mould cheese to Troldhede Dairy in Denmark to increase efficiencies and to make the site more environmentally sustainable.
This means that Lillebælt Dairy, also in Denmark, will close – though not before the beginning of 2019.
The board of Arla Foods has taken the decision to close Lillebælt Dairy, which produces white mould cheese under the Castello trademark.
In the future these cheeses will be produced at Troldhede Dairy, where there are better opportunities to make long-term investments in quality and efficiency.
The closure of the dairy is expected to be completed in the beginning of 2019, however, Arla has chosen to inform the 66 colleagues who are affected today, so it has more opportunities to help them into new jobs. ■