Muller and Arla Announce Milk Price Cuts Amid Weakening Dairy Markets

Two of the United Kingdom's largest dairy processors, Muller and Arla, have declared cuts to their farmgate milk prices, a move that reflects ongoing difficulties in the global dairy market. Muller's price adjustment will take effect on December 1, 2025, reducing the rate by 1.5 pence per litre to 40 pence per litre under its Muller Advantage programme. This programme incentivizes farmers on sustainability and herd health.

Arla Foods, another key player, has announced a decrease of 2.63 pence per litre for conventional milk, effective November 1, lowering the price to 42.71 pence per litre. However, Arla's organic milk price will remain at 57.95 pence per litre. According to Arla, the price cut is a response to 'ample milk availability' and softening commodity markets.

Richard Collins, Agriculture Director at Muller Milk & Ingredients, indicated that the price reduction mirrors the tough global market situation and higher-than-anticipated production volumes. He emphasized the company's commitment to a competitive and stable milk pricing strategy while monitoring supply and demand closely.

Industry analysts note that milk production has outpaced demand in global and EU markets, which is driving down farmgate prices. This situation poses a significant challenge for British dairy farmers, who are already grappling with high feed and energy costs, further squeezing their profitability margins.

The recent price adjustments by Muller and Arla underscore a challenging winter period for the UK's dairy sector. Analysts predict that unless there is an improvement in global demand or a reduction in production levels, milk prices may remain under pressure into early 2026.