Losses build for dairy farmers as milk prices drop to 35p/litre

Dairy producers face an extended period of loss-making after milk processors announced further price cuts for June and July.

Farmgate milk prices paid by some processors have fallen by more than 30% in the past six months.

Processors cited weak wholesale prices and retail demand as the main drivers for the continued fall in farmgate values.

See also: What’s the global picture for dairy markets?

GB milk supply is currently falling following the spring peak in early May, and daily milk deliveries are roughly in line with the same week last year at 36.62m litres.


Dairy farmers supplying Arla will receive a price cut of 1.78p/litre in June, with an on-account price of 35.21p/litre for a standard manufacturing litre (4.2% butterfat and 3.4% protein).

The company’s organic milk price will also decrease in June by 0.89p/litre to 40.88p/litre.

Prices paid by Arla have fallen by almost 16p/litre since the beginning of the year.

The processor said global milk supply continued to grow and both the food service and retail sectors were under pressure as consumers continue to buy less and cheaper dairy products.

Paul Savage, Arla UK agriculture director, said: “Our farmer-owners are still facing historically high on-farm costs, and as a co-operative business we continue to support them to deliver sustainable and nutritious dairy products.”


Muller producers will receive a July price of 38p/litre for a standard liquid litre (4% butterfat and 3.3% protein), including its 1p/litre advantage premium. This is a 2p/litre cut on the previous month.

Richard Collins, Muller’s head of agriculture, said: “We continue to face into market pressures coupled with supply being ahead of forecast, so we must reduce the price we pay supplying farmers.

“Everyday, people enjoy the products we make, right across the country, and we remain committed as always to paying a competitive milk price and ensuring security of supply.”


Producer supplying Freshways will also face a 2p/litre price cut for July, putting a standard liquid litre at 36p/litre.


Barber’s Cheesemakers will pay its producers a July price of 37.04p/litre based on a standard manufacturing litre; this is a 2p/litre price drop on the previous month.