Danish-Swedish dairy co-op Arla has announced a revenue of €15.1 billion for 2025.

Arla said its 2025 revenue was driven by "record milk intake" of 14.3 billion kilogrammes and high commodity prices in the first half of last year.

The business said it also saw "exceptional growth" in the ingredients business.

Arla has reported a net profit for last year of €415 million.

The business' board of directors said that its financial position allows it to propose a supplementary payment of 2.2c/kg of milk to farmers.

Arla said these financial results were achieved against a backdrop of "two very different market realities".

While the year began with a strong demand and a balanced supply, the "landscape shifted dramatically" in the second half, the business said.

Exceptional weather conditions and strong feed harvests across Europe triggered a rapid surge in milk volumes, according to Arla.

Towards the second half of 2025, milk supply increased significantly across Europe, including key Arla markets like the UK and Denmark (7.7% and 3.6% for 2025 compared to 2024, respectively).

This sudden increase in supply, which Arla called one of the sharpest uplifts in recent years, triggered a shift in market dynamics, with the surplus supply forcing global trading prices down, putting pressure on the general value of milk across the industry.

However, Arla said it "successfully navigated" the drop in global markets.

A key factor in the year's result, the company said, was the exceptional performance of Arla Foods Ingredients (AFI).

The subsidiary delivered a revenue increase of 43.1 %, driven by strong global demand for value-added protein and the successful integration of the newly acquired whey nutrition business from Volac (now AFI Felinfach).

Arla said it has committed to invest in "transformative projects" in 2025, with the cooperative committing to an investment level of €731 million, directing capital towards expanding capacity in high-growth categories.

These investments will include the creation of a 'centre of excellence' in Scotland for UHT milk, and an expansion of a cream cheese facility in Denmark.

The company is also progressing a planned merger with German dairy business DMK Group, which is expected to conclude in the first half of this year.

2026

Looking ahead to 2026, Arla said it is anticipating the volatile market conditions in late 2025 to persist into this year, with the supply surge seen in the fourth quarter expected to continue impacting the market in early 2026, putting pressure on global dairy price levels.

However, the business is also anticipating a partial normalisation later this year as supply and demand dynamics adjust.

Arla said it is expecting group revenue for 2026 - not including the planned merger with DMK Group - to be down slightly on 2025, falling somewhere between €13.3 billion and €14.1 billion, reflecting lower market prices compared to the highs in early 2025.

'Our strategy is working'

Commenting on these financial results, Peder Tuborgh, CEO of Arla Foods, said: "Our historic performance demonstrates that our strategy is working.

"We have strengthened our market position, delivered record value for our farmer owners, and taken important steps toward a more sustainable future," Tuborgh added.

"As a farmer, it gives me confidence to see our cooperative navigate this volatility and once again prove its worth as a strong, competitive home for our milk," the Arla CEO said.

"We are seeing a natural market cycle where high milk production brings prices down across the sector. While the abrupt increase creates challenges, our business stands on strong pillars," he added.

Looking ahead to 2026, Tuborgh said: "The pressure from high milk volume will characterise the first part of the year, but we also see the opportunities this brings.

"As prices adjust, we expect consumers to return to the dairy aisle with renewed strength, driving growth for our strategic brands," he added.