Dairy Farmers Face Challenges as Milk Prices Fall Below Production Costs
Dairy farmers in the United Kingdom are facing significant financial challenges as milk prices have fallen below the cost of production. Current industry data shows farmers receiving between 32 and 35 pence per litre of milk, while production costs can reach up to 49 pence per litre. This disparity has led to concerns about the sustainability of dairy farming, particularly for small family-run farms.
Ben Yates, a dairy farmer from Frome, Somerset, expressed his concerns, stating, "If we don't sort out the milk price pretty quickly, there'll be no industry left." His sons, who aspire to continue the family farming tradition, are witnessing firsthand the difficulties posed by these economic conditions. The Yates family is not alone in their struggle. Tom Kimber, a 10th generation dairy farmer in Somerset, described the situation as "terrifying," emphasizing the cumulative impact of rising costs and stagnant milk prices.
According to the Agriculture and Horticulture Development Board (AHDB), the number of dairy farms in the UK has decreased to a record low of 7,010, down from 8,310 in 2020. Despite the decline in the number of farms, total milk production has increased by 4% due to larger farms compensating for the losses of smaller ones.
Impact of Global Events and Rising Costs
Milk prices have fluctuated significantly in recent years, influenced by global events. For instance, British farmers benefited from higher milk prices following the Russian invasion of Ukraine in 2022, with prices reaching up to 55 pence per litre. However, this was short-lived, and prices have since dropped. As of late 2025, farmers are facing a worldwide glut, causing prices to fall even further.
Additionally, the cost of farm inputs such as 'red' diesel and fertilizer has surged, exacerbating financial pressures on farmers. A 50% increase in fertilizer costs has been noted since the Russia-Ukraine conflict, according to Yates. These rising costs, coupled with unchanging milk prices, are forcing farmers to reconsider their operations.
Adapting to Economic Pressures
To cope with these economic challenges, some farmers, like Tom Kimber, have diversified their operations. The Kimber family operates a farm shop selling their own beef, pork, and dairy products, including raw milk. This approach helps mitigate the financial impact of fluctuating milk prices.
Despite these efforts, the outlook for small family farms remains uncertain. As winter approaches, many farmers are worried about the additional costs associated with feeding and managing their herds. The current economic conditions have prompted some farmers to consider leaving the industry altogether, with Kimber noting, "It just can't be done, and there will be people looking at it and thinking 'I'm done.'"
