The Crisis Facing Britain's Dairy Farmers Amid Falling Milk Prices

British dairy farmers are grappling with significant financial losses due to plummeting milk prices, which have fallen to as low as 29p per litre, while production costs hover around 40p per litre. Paul Tompkins, a dairy farmer in the Vale of York, highlights the stark reality of his situation, stating, “Every morning that I roll out of bed at 4.40am, I know I’m losing £1,800 that day, just by getting up.” This crisis is exacerbated by a global oversupply of milk, driven by increased production in countries like the United States and New Zealand, which has outstripped demand.

The Guardian

The Agriculture and Horticulture Development Board (AHDB) reports that British farmers produced over 7% more milk in the last quarter of 2025 compared to the five-year average. This overproduction can be traced back to favorable conditions earlier in the year, which led to record-breaking yields. However, the situation has worsened, with some farmers and processors forced to discard excess milk due to an inability to manage the surplus. Robert Craig, chair of the Royal Association of British Dairy Farmers, notes that many farmers are losing money or barely breaking even, stating, “Unless you’re on a cost-of-production-aligned retail contract now, you’re losing money.”

The Guardian

The dairy sector is facing multiple economic pressures, including rising costs for fertilizers and fuel, labor shortages following Brexit, and new inheritance tax regulations on agricultural assets exceeding £2.5 million. Since the pandemic, nearly 20% of British dairy farmers have exited the industry, reducing their numbers from 8,720 to 7,010. Experts predict that the current price shock could lead to an additional 10% of dairy producers leaving the market, further consolidating the industry.

The Guardian

Emma Reynolds, the UK Environment Secretary, has expressed support for farmers, acknowledging their resilience amid volatile markets. However, the government’s assurances may not alleviate the immediate financial strain faced by many producers. The AHDB indicates that while wholesale prices for dairy products are expected to decline, consumers may not see these reductions reflected in retail prices for several months. For instance, significant price drops for butter and cheddar are anticipated only from April and July, respectively.

The Guardian

• “Every day we get up and try to do more with less.” — Paul Tompkins, Dairy Farmer

The Guardian

• “It’s a combination of factors, if you don’t have a successor, if you have got to reinvest in slurry and silage capacity just to manage production which won’t put on the bottom line, then why would you do all that at a milk price of 35p?” — Mike Houghton, Farm Consultant

The Guardian

• “Unless you’re on a cost-of-production-aligned retail contract now, you’re losing money, or, at very best, breaking even.” — Robert Craig, Chair of the Royal Association of British Dairy Farmers

The Guardian

The current crisis in the British dairy industry underscores the challenges faced by farmers amid fluctuating market conditions and rising operational costs. As the sector consolidates and more producers exit, the long-term sustainability of dairy farming in the UK remains uncertain.

The Guardian