Q2 2025 UK dairy product available supplies build up

Key trends

• Record UK milk volumes have boosted supplies of dairy products
• Butter and cheese supplies picked up due to higher production and cheap imports
• British cheese commanded good export demand during the period

British milk production recorded new peaks this milk season boosted by favourable dairy economics. UK milk deliveries in the second quarter of the calendar year (Apr–Jun) totalled 4217m litres (6.3%) higher year-on-year. This has built supplies of dairy products in the second quarter of 2025.

Supplies of cheese continue to grow

Cheese stocks were reported to be in surplus due to a 6% boost in production (7,500 tonnes) compared to last year. Most imports came from the EU followed by New Zealand. Though overall imports were on the higher side, there were less imports from New Zealand during the quarter year-on-year. Lower imports from New Zealand were compensated for by increasing imports from the EU (France, Ireland and Spain).

UK cheese prices have been less attractive on the global market. Despite this, export demand picked up from some Asian and MENA (Middle East and North Africa) nations growing by 5% (3,000 tonnes). The combination of these factors resulted in available supplies of cheese growing by 3% (6,500 tonnes).

Butter supplies fattened up

Butter supplies boomed after the scarcity seen in Q1 2025 vs the same period last year. Production increased by 18% (9,000 tonnes) year-on-year in Q2 following higher prices in UK wholesale markets, and also record high milk volumes in the domestic market growing availability of dairy fats for processing. Imports also picked up by 5% (1,000 tonnes) during the period following availability of cheaper US and Oceania butter in the market. Exports declined marginally by 1% as UK butter remained less competitively priced on the global market. Higher production and imports paired with lower exports resulted in a growth in butter stocks of 18% (10,000 tonnes).

N.B. Supplies of milk powders are not available due to lack of data on production issued by Defra

Looking ahead, falls in milk prices are expected amid declining commodity prices and a surplus of milk in the domestic market. We are seeing price corrections on the continent as well, likely to influence the production of dairy products. It will be important to watch how much milk prices fall in the coming months, which will determine the level of milk output.

The impact of Trump tariffs and other geopolitical factors will be key to trade dynamics. The recent outbreak of Lumpy Skin Disease (LSD) in Spain will be an important factor to watch as the extent of the disease outbreak will affect milk flows on the continent. Rabobank has predicted faster growth in global supply in the second half of 2025. How demand absorbs this growth will be important at a time when GDP growth remains sluggish.

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