Overview of the UK Dairy Industry

The United Kingdom holds a significant position in the global dairy market, producing approximately 15 billion liters of milk annually. This production is supported by a robust dairy cattle herd numbering 1.8 million, underscoring the UK's vital role in the international dairy supply chain.

Dairy Processing and Production

The UK boasts a highly advanced dairy processing infrastructure, producing around 450,000 tonnes of cheese, 150,000 tonnes of milk powder, and 300,000 tonnes of whey each year. These capabilities strengthen the UK's competitiveness in global markets and support its active export activities.

Key Dairy Enterprises

Several leading companies drive the UK's dairy industry, including Arla Foods, Müller, Long Clawson Dairy, and Millbrook Dairy. Arla Foods is known for its innovative approaches, Müller enhances processing capacities for smaller farms, Long Clawson Dairy is famous for its Stilton cheese, and Millbrook Dairy is noted for its charitable contributions.

Export and Import Dynamics

The UK is heavily involved in international dairy trade, with exports valued at approximately £1.6 billion annually. However, imports slightly exceed exports, totaling about £2.2 billion, driven by strong domestic consumption. The European Union remains the primary market for UK dairy exports, with a record £1.1 billion in exports during the first half of 2025, marking a 20% increase from the previous year.

Recent Events and Developments

Recent developments in the UK dairy sector include Arla's new product launches and Müller's initiatives to support small farms. The Dairy Roadmap coalition emphasizes climate and sustainability goals, while innovation initiatives in Northern Ireland and research at Scotland's Rural University and College underscore sustainability efforts. Notably, Arla Foods is planning a robotic expansion at its Oswestry plant to enhance pallet-moving capabilities.

Trends and Challenges

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

Additional Insights

Over 50 UK dairy farms have joined the new Dairy Carbon Network to reduce emissions and enhance productivity. Arla has launched its Cultura product line, focusing on gut health, with a UK launch on September 1st. The UK's dairy sector leads the global market with an 84% uptake of sexed semen, with Holsteins at 89%. The GB Calf Strategy 2025-2030, unveiled at UK Dairy Day, marks a significant milestone in dairy farming.

Concerns about American cheese and butter flooding British shelves have been largely dismissed, as the US exports only 65 tonnes of cheese to the UK annually. Recent approvals for dairy farm developments highlight ongoing growth, while dry weather conditions pose challenges for organic farmers. The newly established Association of Dairy Producer Organisations aims to strengthen farmer representation and facilitate dialogue with the dairy processing sector, ensuring the continued growth and sustainability of the UK dairy industry.

Innovative Sensor to Combat Calf Pneumonia

Pneumonitor, a cutting-edge sensor developed in the UK, enables dairy farmers to detect and prevent pneumonia in calves by monitoring pen conditions in real-time. AgriSearch is seeking increased funding through enhanced farmer levies in Northern Ireland. Import restrictions due to the bluetongue virus have thwarted efforts to purchase replacements from Britain, forcing farms to seek alternatives from Ireland.

Kerry Dairy Consumer Foods initially launched its Smug hybrid range in the UK last year. Recent FDOM regulations aim to enhance price transparency and empower Dairy Producer Organisations. UK dairy farmers must now incorporate market trends into their business strategies. The FDOM (Fair Dealings Obligations (Milk)) Regulations, fully enacted in July 2025, enhance transparency in farm gate milk prices without setting the prices themselves. The UK's trade agreements with India face significant barriers due to India's dairy protectionism.

Dairy farmers in the South West of England report strong financial recovery over the past 12 months, driven by higher milk prices and lower feed costs.

Modified: 2025/10/06