UK dairy production to rise in 2025 despite challenges

British milk production is on track to grow by 1.1% in 2025 according to the latest report from the Agriculture and Horticulture Development Board (AHDB). The initial months of the 2024/25 milk year faced slow growth, hampered by unfavorable weather and low prices. However, conditions began to improve in September, marked by rising prices and better margins, enabling a recovery in milk flows.

As per Susie Stannard, AHDB senior analyst for dairy, the sector is on a path to recovery with increased prices and stronger milk-to-feed ratios motivating higher production. Stannard emphasizes, “While signs of recovery are visible, the sector must remain vigilant against global risks, including unstable commodity prices and potential disease outbreaks.”

The milk price remained strong in the short term, recording an average of 45.14ppl in October 2024, but may see a downward trend as production surges amidst leveling consumer demand in 2025. The retail milk demand remains stable, albeit with a slight drop in household consumption as more workers return to offices.

Demand for cheese is expected to rise due to ongoing promotions, while butter faces price competition from plant-based products. Yogurt sales are predicted to grow, driven by rising health consciousness among consumers.

Stannard adds, “The dairy sector has demonstrated resilience despite significant challenges, although future success will depend on balancing production increases against demand fluctuations and external pressures.”

With factors such as disease control and policy changes influencing the market, the UK dairy industry approaches 2025 with cautious optimism. The AHDB also plans to release Agri-Market Outlooks for other sectors like Beef, Lamb, Pork, Cereals, Oilseeds, and Farm inputs soon.