Britain's dairy farmers face a daunting reality as the country struggles with plummeting milk prices, leaving many producers operating at a loss. Paul Tompkins, a third-generation farmer in the Vale of York, knows this all too well. Every morning, he wakes up knowing that he is losing £1,800 by getting out of bed.
Tompkins' farm produces around 40p per liter of milk from its 500-strong herd of black and white Holstein cows, but he is only being paid 29p per liter by his milk processor. This tight margin in an industry where supermarkets have traditionally used low milk prices to attract customers has left many farmers struggling.
The UK processing industry is dominated by three major players - Arla, Müller, and First Milk. Tesco, Sainsbury's, Morrisons, and Asda are currently charging £1.65 for four pints, equating to 73p per liter. Tompkins believes that if farmgate milk prices remain at the current level, his farm will make a loss of at least £660,000 this year.
The decline in milk prices has been attributed to global oversupply and demand imbalance. Mike Houghton, a farm consultant, warns that the situation is "a perfect storm" with American production up and New Zealand hanging on, but China not keeping pace. The UK produced over 7% more milk than usual in the last three months of 2025 compared to the five-year average.
To cope with the oversupply, some farmers bought animal feed for their herds at a relatively low price, leading to record-breaking volumes from well-fed cows. This has put pressure on processors, who have struggled to keep up. Some producers and processors have had to throw away milk due to the quantity.
The situation is different from last year when some farmers benefited from higher wholesale prices. However, many dairy farmers face financial pressures, with nearly 20% of British producers quitting since October 2019. The government's move to introduce inheritance tax on agricultural assets above £2.5m has also been a concern.
Despite this, the volume of milk produced in Britain has remained steady due to consolidation in the sector and larger herds. However, experts warn that the latest price shock will lead to more farmers leaving the industry. Houghton predicts that up to 10% of dairy producers - or around 700 farmers - could leave for good.
The question remains whether falling wholesale prices will be reflected in the cost of dairy products on consumers' shopping baskets. The average time lag for lower prices feeding through to consumers is seven months, according to the AHDB. Retail prices for butter are expected to fall "but not until April", while the price of cheddar is expected to start coming down from July.
However, experts warn that lower milk prices will not trickle down to consumers immediately. Rent and people costs remain substantial, and the minimum wage is set to increase again. Chains may reduce their price increases but are unlikely to pass on lower prices to consumers.
Tompkins' farm produces around 40p per liter of milk from its 500-strong herd of black and white Holstein cows, but he is only being paid 29p per liter by his milk processor. This tight margin in an industry where supermarkets have traditionally used low milk prices to attract customers has left many farmers struggling.
The UK processing industry is dominated by three major players - Arla, Müller, and First Milk. Tesco, Sainsbury's, Morrisons, and Asda are currently charging £1.65 for four pints, equating to 73p per liter. Tompkins believes that if farmgate milk prices remain at the current level, his farm will make a loss of at least £660,000 this year.
The decline in milk prices has been attributed to global oversupply and demand imbalance. Mike Houghton, a farm consultant, warns that the situation is "a perfect storm" with American production up and New Zealand hanging on, but China not keeping pace. The UK produced over 7% more milk than usual in the last three months of 2025 compared to the five-year average.
To cope with the oversupply, some farmers bought animal feed for their herds at a relatively low price, leading to record-breaking volumes from well-fed cows. This has put pressure on processors, who have struggled to keep up. Some producers and processors have had to throw away milk due to the quantity.
The situation is different from last year when some farmers benefited from higher wholesale prices. However, many dairy farmers face financial pressures, with nearly 20% of British producers quitting since October 2019. The government's move to introduce inheritance tax on agricultural assets above £2.5m has also been a concern.
Despite this, the volume of milk produced in Britain has remained steady due to consolidation in the sector and larger herds. However, experts warn that the latest price shock will lead to more farmers leaving the industry. Houghton predicts that up to 10% of dairy producers - or around 700 farmers - could leave for good.
The question remains whether falling wholesale prices will be reflected in the cost of dairy products on consumers' shopping baskets. The average time lag for lower prices feeding through to consumers is seven months, according to the AHDB. Retail prices for butter are expected to fall "but not until April", while the price of cheddar is expected to start coming down from July.
However, experts warn that lower milk prices will not trickle down to consumers immediately. Rent and people costs remain substantial, and the minimum wage is set to increase again. Chains may reduce their price increases but are unlikely to pass on lower prices to consumers.
. It's like, they're making 40p per liter of milk from their cows but only getting paid 29p by the processor. That's a huge gap right there! I'm no expert, but it seems to me that processors have too much power in this industry and are just taking advantage of farmers.
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It's not fair at all. I mean, we're always saying how much we love a good cuppa or a slice of cheese, but have we ever stopped to think about where our dairy products come from?
I've heard of some farmers buying animal feed at a low price to increase production, but that's not sustainable in the long run.
We need to support our local farmers and make sure they're getting a fair deal for their hard work. Maybe we can look into community-supported agriculture (CSA) programs or shop at farmers' markets to get more involved in the process.
Seven months is a long time, and who knows when we'll see those price drops? Still, I hope these farmers can find ways to stay afloat and keep producing that delicious milk for us to enjoy! 
I mean come on, £1,800 just for getting out of bed? That's not a farm income, that's a personal financial crisis! 
What's the point of having all those cows if you can't even break even? We need some serious reform in the dairy industry, like introducing a price floor or something. I mean, China's not keeping pace with production, so why aren't we getting higher prices for our milk? It's not like we're producing less, just as much as everyone else... 
. They're struggling so much because of the low milk prices, and it's not just the UK, it's happening all over the world 
. It's like they're losing money left and right... I wonder how many farmers will quit the industry this year 
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. The UK's milk production has increased by 7% in just three months, and it's got everyone worried 
. If we look at the graph of global oversupply vs demand, it's clear that prices are going to continue plummeting 
. And even then, it's not guaranteed that chains will pass on the savings to us customers. I'd love to see some charts showing how consumer spending has reacted to milk price changes... maybe something like this? 
40p/ltr farmgate vs 73p/ltr retail. That's a huge difference 
. It's like they're throwing money out the window 
. And with nearly 20% of farmers quitting since 2019, it's already bad news 
. Until then, farmers will keep losing 
. And it's not just the farmers who are affected, it's also the consumers... or so we think 
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. I hope something changes soon because this just isn't right 
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de oversupply situation is whack & it's a real challenge 2 keep up 
its like the farmers are getting robbed blind! they're losing £1,800 a day just from milk prices alone 
its like they're just done 
thats a lot of farms shutting down, what will happen to the uk's dairy industry then? 
but at least china's keeping up (kinda) and americans r producing more milk 
its just so frustrating when u think about all these farmers struggling to make ends meet 