United Kingdom Dairy Industry Overview

The United Kingdom is a key player in the global dairy market, producing around 15 billion liters of milk each year. The industry is supported by a substantial dairy cattle population of approximately 1.8 million, underscoring the UK's significant contribution to the international dairy supply chain.

Dairy Processing and Production

The UK is equipped with advanced dairy processing facilities, generating around 450,000 tonnes of cheese, 150,000 tonnes of milk powder, and 300,000 tonnes of whey annually. These capabilities enhance the UK's competitiveness in global markets and support its substantial export activities.

Key Dairy Enterprises

Prominent companies in the UK dairy sector include Arla Foods, known for innovation and product launches, and Müller, which supports smaller farms with enhanced processing capabilities. Long Clawson Dairy is renowned for its Stilton cheese, while Millbrook Dairy is recognized for its charitable contributions.

Export and Import Dynamics

The UK plays a significant role in international dairy trade, with exports valued at approximately £1.6 billion annually. However, imports exceed exports, totaling £2.2 billion, driven by high domestic consumption. The European Union remains the primary market for UK dairy exports, with notable growth observed in 2025.

Recent Events and Developments

Recent developments include product launches by Arla and initiatives by Müller to support small farms. The Dairy Roadmap coalition focuses on climate and sustainability goals, with Arla Foods planning to upgrade its Oswestry plant with robotic technology. Innovation is emphasized in Northern Ireland, while Scotland's Rural University and College invests in sustainability research.

Trends and Challenges

The UK dairy industry faces challenges such as livestock import restrictions and evolving market demands. Despite a decrease in the number of dairy farms, increased milk production per farm has led to a 10% rise in milk output year-on-year. Ice cream consumption remains strong at about 320 million kilograms annually. Other challenges include milk collection issues and a shift towards health-conscious consumer preferences.

Sustainability Initiatives

Over 50 UK dairy farms have joined the Dairy Carbon Network to reduce emissions and enhance productivity. Arla has launched its Cultura product line focused on gut health. The UK dairy sector is a leader in adopting sexed semen, particularly for Holsteins, with an 84% adoption rate. The GB Calf Strategy 2025-2030 was unveiled at UK Dairy Day, marking a significant milestone in dairy farming.

Regional Insights

Dairy farmers in South West England have experienced financial recovery due to higher milk prices and reduced feed costs. Northern Ireland is addressing challenges like changing weather conditions and global trade uncertainties. Scotland's Rural College developed the 'farm-twin,' the world's first 'digital twin' for dairy farming.

Regulatory Developments

Recent reductions in milk prices by up to 18% have prompted UK MPs to advocate for stronger regulation of the dairy industry. A dairy farm in Tyrone invested £750,000 to transform its operations, boosting milk production by 500,000 liters annually with support from Ulster Bank.

Market Outlook

UK milk prices are projected to fall below 40p per liter by year-end due to declining wholesale values and oversupply. GB milk deliveries remain over 6% higher than the previous year, increasing market pressures. British consumers currently pay more than $A2 per liter for milk, with the average price in Great Britain at $A2.20.

Innovations and Awards

Fermentrics (UK) Ltd. has been recognized by the UK Dairy Carbon Network for its innovative technology, winning the 2025 measurement technology competition. The UK Dairy Carbon Network collaborates with over 50 dairy farms across the UK, focusing on practical solutions to reduce GHG emissions.

Market Variability

The UK dairy market is experiencing significant variability, particularly in milk prices. The Department for Environment, Food & Rural Affairs (DEFRA) reported a milk price of 46.54ppl for September, marking the 15th consecutive month prices exceeded 40ppl. This period coincides with high milk production volumes of 1,239 million liters for the same month.

The UK dairy sector is experiencing a significant oversupply issue. During the Christmas period, Freshways, a leading dairy processor, reported that it was forced to dispose of surplus milk due to this crisis, highlighting the supply-demand disconnect within the industry. This situation reflects broader challenges faced by UK dairy producers and processors, with production volumes exceeding processing capacities and retail demand.

Modified: 2026/01/14