Overview of the United Kingdom Dairy Industry

The United Kingdom plays a crucial role in the global dairy market, producing approximately 15 billion liters of milk annually. This production level is supported by a population of 1.8 million dairy cattle, highlighting the UK's significant contribution to dairy production worldwide.

Dairy Processing and Production

The UK has a well-developed dairy processing infrastructure, with an annual production of approximately 450,000 tonnes of cheese, 150,000 tonnes of milk powder, and 300,000 tonnes of whey. This advanced processing capability ensures the UK's competitiveness in the global dairy market.

Key Dairy Enterprises

Leading companies such as Arla Foods, Müller, Long Clawson Dairy, and Millbrook Dairy are at the forefront of the UK dairy industry. Arla Foods is known for its innovative product offerings, while Müller focuses on enhancing processing capacities to support smaller farms. Long Clawson Dairy, famous for its Stilton cheese, has seen significant sales growth in 2023. Millbrook Dairy is recognized for its charitable efforts, including the Tuk-Tuk Charity Challenge.

Export and Import Dynamics

The UK is actively involved in international dairy trade, with exports valued at approximately £1.6 billion annually. However, imports slightly exceed exports at around £2.2 billion, creating a trade imbalance due to strong domestic consumption. The European Union remains the primary market for UK dairy exports.

Recent Events and Developments

Recent developments in the industry include new product launches by Arla and initiatives by Müller to support small farms. Sustainability efforts are evident through the DAERA innovation initiative in Northern Ireland and research at Scotland's Rural University and College. The Dairy Roadmap coalition aims to achieve climate and sustainability goals across the supply chain.

Trends and Challenges

The UK dairy industry faces challenges such as livestock import restrictions and changing market demands. Despite a decline in the number of dairy farms, milk production per farm has been increasing, and an uptick in farm gate milk prices has led to a 10% year-on-year rise in milk output. Additionally, the UK consumes approximately 320 million kilograms of ice cream annually, supporting the local economy and regional suppliers.

Additional Insights

There are unique challenges and opportunities in the UK dairy industry. Recent protests have highlighted issues related to milk collection, and there is a growing focus on health-conscious consumer trends. Arla's commitment to maintaining milk prices for British farmers ensures market stability, though a decline in organic dairy production over the past five years raises concerns about organic milk supply continuity. U.S. dairy leaders have visited the UK to promote fair trade practices, and Castle Dairies in Wales is committed to using 100% UK-sourced natural ingredients. AI technology is being implemented on Scottish farms to reduce livestock losses, and the Great Yorkshire Show remains England's premier agricultural showcase.

Müller's investments have transformed Skelmersdale into a leading facility for liquid milk production. Statistics indicate that 1 in 12 children in the UK have a food allergy, and 50% of households are reducing or avoiding dairy products. The India-UK Free Trade Agreement opens new markets for Indian agricultural products in the UK, allowing zero duties on 95% of India's agriculture and processed food items destined for the UK. The UK dairy industry continues to navigate financial pressures amid escalating input costs and market uncertainty, adapting to ensure continued growth and sustainability.

Fran Ball has been appointed as the new Vice President of UK Supply Chain at Arla Foods, overseeing end-to-end UK supply chain activities and managing a team of over 2,800 employees. Yoplait UK is focusing on expanding its market presence by investing in the high-protein and drinkable yogurt segments, with expectations for the market to exceed £700 million next year, growing at 25% year-on-year. The UK yogurt market, valued at £2.8 billion in 2024, has seen a rise in adult-focused yogurt sales by £177.5 million in value and 6% in volume over a year. UK dairy exports to Egypt are valued at £26 million in 2024, with the UK safeguarding £250 million in trade opportunities by avoiding the halal certification requirement.

The UK's top Holstein genomic young sires are assessed with Peak AltaValuepack leading with a PLI of £877, underscoring the UK's focus on improving health traits and fertility benefits in dairy breeding. Labour shortages threaten food security in England, with Arla Foods' recent survey highlighting ongoing labour shortages impacting food security in England. Lakeland Dairies has set the milk price in Northern Ireland, with the price for July set at 39.3p/litre, including a Sustainability Incentive Payment.

Müller is bringing the journey of milk to life for children across Britain, providing immersive farm experiences to educate children about dairy's role in diets and local production in Britain.

Modified: 2025/08/15