Arla Foods has warned consumers to brace for higher dairy prices and potential shortages in 2024 following continued “geopolitical tensions”.

The milk manufacturer cautioned that looking ahead to the second half of 2024, it “anticipates volatile market conditions,” driven by geopolitical tension and continued uncertainties.

It added that it was “uncertain how consumers will react to the expected higher retail price levels following the commodity price increases” and that the uncertainties were “underlined by a lesser volume of available milk on a global level”.

It comes after Arla Foods, which has a portfolio that includes Lurpax, Cravendale and Castello, achieved a net profit of €167m (£16.4m) in the first half of 2024, while group sales were €6.6bn (£5.5bn).

The milk producer said its performance price and sales for the period were slightly lower than in its 2023 half-year report.

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It has adjusted its full-year sales expectations from €13.2bn (£11.1bn) – €13.7bn (£11.4bn), to €13.4bn (£11.2bn) – €13.9bn (£11.7bn) and strategic branded volume-driven sales growth from 1%-3% to 3%-4%, but added it still expects to deliver profit within the range of 2.8%-3.2%.

Arla Foods CEO Peder Tuborgh said he was “satisfied” with the company’s “robust” half year results.

“We are satisfied that the momentum created by our farmer owners and employees in 2023 has continued into 2024, and today Arla is able to announce a robust half year result with a competitive milk price that paves the way for enhanced sustainability efforts going forward.”

Arla Foods CFO Torben Dahl Nyholm added: “We are very pleased to deliver a competitive milk price. At the same time, the return to branded growth happened with a higher magnitude than expected due to the strength of our brands and successful efforts to regain growth, so we are on a positive trajectory.”