Letters from our Chair and CEO
A competitive home for our milk
In a year of two halves, we confirmed that our cooperative model is a foundation for creating value for our owners and securing the future of dairy.As farmers, we are used to cycles. But the speed of the shift we witnessed this year was extraordinary. We entered 2025 with high prices and tight global availability of milk, only to see the tables turn rapidly in the second half. Exceptional weather and strong harvests across Europe triggered a wave of milk that surged into the market, causing global commodity prices to correct sharply downwards.
“I am proud that we are able to look back on a year where Arla delivered a highly competitive performance price”
In such a volatile environment, the strength of our collective business becomes our greatest asset. Arla has once again proven its fundamental worth: securing a competitive home for our milk.
Delivering a competitive result
Despite the pressure on prices in the second half of the year, I am proud that we are able to look back on a year where Arla delivered a highly competitive performance price of 56.4 EUR-cent/kg. This result did not happen by accident. It is the reward for the strategic choices we have made as owners. By ensuring we have solid footing, through our brands and ingredients, we are less vulnerable when the wind changes. When commodity markets fell this autumn, this strength helped us deliver the competitive milk price. Based on this solid financial footing, the Board of Directors (BoD) were pleased to propose a supplementary payment of 2.2 EUR-cent/kg to our owners. This payment is a testament to the robustness of our cooperative.
Farming with the future in mind
While the markets fluctuated, the dedication on our farms remained constant. The data from 2025 shows that Arla farmers are not just talking about the future - we are actively building it.
We saw the average FarmAhead™ Incentive score rise from 53 to 55 points this year. This is not just a statistic for a report - it represents real, tangible actions taken on thousands of farms to lower emissions and increase biodiversity. As owners, we are proving that modern dairy farming is part of the solution to the climate challenge.
Strength through unity
Looking ahead, the need for a strong, unified cooperative is clearer than ever. The challenges we face, from market volatility to regulatory demands, requires scale. This is why the proposed merger with DMK Group is such a pivotal moment for our cooperative. In June, our Board of Representatives voted to pursue this union, recognising that by joining forces with another strong farmer-owned cooperative, we can secure an even more robust platform for our milk. As we await the regulatory outcome in 2026, I am confident that we are taking the right steps to secure the future for the next generation of dairy farmers. 2025 was a year of two halves, but it told one consistent story: Arla is working. We have a strategy that drives value, a democracy that drives progress, and a cooperative spirit that binds us together through every turn of the market.
Jan Toft Nørgaard
CHAIR of Arla
Dairy is more important than ever
Arla has delivered a robust performance in a complex market, proving the resilience of our brands. We successfully navigated economic pressures to drive growth, keeping our high-quality nutrition accessible and staying true to our long-term promise: providing nutritious, sustainable food to a world that needs it.
In 2025, Arla Foods delivered a highly competitive result with revenue reaching EUR 15.1 billion in a year defined by a distinct shift in market dynamics.
By navigating a sharp transition from tight global supply to sudden abundance, we proved the resilience of our business. We secured a strong financial performance for our owners not just to deliver a return, but to ensure we remain robust enough to fulfill our long-term promise: providing nutritious, sustainable food to a world that needs it.
Navigating contrasting realities
We began 2025 with firm markets, but the landscape shifted rapidly. Exceptional weather and strong harvests across Europe triggered a surge in milk production, causing commodity prices to drop significantly in the second half of the year.
Despite this rapid shift, our strategic business mix stood firm. By leveraging a high-performing ingredients business and capturing returning consumer demand, we managed the volatility to deliver a performance price of 56.4 EUR-cent/kg.
Ingredients engine drives value
A standout driver for our strong performance was Arla Foods Ingredients. Delivering revenue growth of 43.1%, boosted by the successful integration of the newly acquired Whey Nutrition business from Volac (now AFI Felinfach), AFI has cemented its role as a high-value growth engine.
AFI’s success provides a critical financial counterweight to volatility in the general dairy market, validating our strategy to shift more milk into specialised nutrition.
Investing in a world that needs dairy
Crucially, we did not let short-term market fluctuations pause our long-term ambition. In 2025, we executed on a high level of investments, including capacity expansions in Lockerbie (UHT) and Holstebro (cream cheese).
We did not pause these investments when the market turned, and that is a deliberate choice. We know that the world will need significantly more protein in the coming decades to feed a growing population. Dairy is a central part of the solution.
By investing in these key growth engines, we are sending a clear signal: We believe in the future of dairy. We are taking the responsibility to ensure that nutritious, sustainable dairy is available to the world, and we are building the capacity to lead that charge.
“By navigating a sharp transition from tight global supply to sudden abundance, we proved the resilience of our business.”
Resilient brands driving value
Our brands demonstrated resilience and value creation in 2025. Our total branded revenue increased by 6.9% to EUR 7,029 million, driven by our ability to maintain rightful price points.
Our branded volumes told a story of recovery. While the higher price points meant consumers started the year hesitantly, increasing wages and easing inflation restored purchasing power.
Momentum built steadily, returning our strategic brands to volume growth in the second half of the year. This recovery proves that our brands remain highly relevant. When economic pressure eased, consumers returned to the products they trust, and we ended the year with full-year volume growth of 0.2%.
Outlook for 2026
We enter 2026 fully prepared for the market conditions ahead. The supply pressure from late 2025 will continue to impact the first half of the new year. However, lower price levels are expected to stimulate volume growth for our brands, and we are well-positioned to drive this momentum.
PEDER TUBORGH
CEO of Arla
