Q4 2025 UK dairy product availability remains mixed

Key trends

• Butter supplies continued to tighten following lower production and imports
• Supplies of cheese strengthened amid an increase in production and imports
• Cheese continued to have good demand in the export market

GB milk deliveries continue to break records in volume and quality in 2026 due to cheaper feed prices and higher milk constituents. UK milk deliveries in the fourth quarter of the calendar year (Oct-Dec) totalled 3,936m litres (5.9%) higher year-on-year.

Supplies of cheese continue to grow

Record milk volumes have favoured increasing production of cheese. Cheese availability was reported in surplus following a boost in production by 5% (6,400 tonnes) compared to the previous year (see figure 1. Imports increased and around 99% of the imports came from the EU (Ireland, France, Spain and Denmark). However, in the last quarter there were no imports from New Zealand. Oceania cheese was costlier compared to domestic market.

British cheese was competitive on global markets and exports picked up in the fourth quarter of 2025 by 17% (7,900 tonnes) to 54,800 tonnes.

Globally, the biggest increase in cheese volumes went to the EU (the Netherlands, Germany, Belgium, Denmark and Spain) followed by Asia and Oceania (China, Hong Kong, Indonesia and Malaysia) and the Middle East and North Africa (Bahrain, Egypt and Lebanon).

A decline in exports to North America, Sub-Saharan Africa and Latin America and Caribbean scaled down the overall increase in exports.

Growing cheese production and imports paired with an increase in exports resulted in a small increase in cheese stocks of 4% (6,600 tonnes).

Butter supplies trend down

Butter production declined by 4% (1,800 tonnes) year-on-year in Q4 amid lower prices in UK wholesale markets during the fourth quarter. Exports increased by 30% (3,200 tonnes) during the period (see figure 1).

The biggest increase in exports went to Europe (Belgium, France and Malta) followed by the Middle East and North Africa (Libya, Kuwait, Egypt and the United Arab Emirates). Price competitiveness in the global market supported the growth in exports.

Coupled with production decline, imports also remained on the lower side due to lack of demand in the domestic market. Taken together butter stocks shrank by an estimated 16% (8,100 tonnes)

Figure 1. 2025 Q4 Year-on-year change in UK dairy product availability (thousand tonnes)¹

Source: Defra, HMRC Compiled by Trade Monitor LLC

Figure 1 shows production, imports and available supplies of butter are down year-on-year, while exports are up. All four categories are up for cheese.

1 product availability is defined as: production + imports – exports

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

Looking ahead, cautious optimism is expected on dairy markets despite volumes of milk remaining at record levels in the domestic market. We are seeing some signs of price recovery here and on the continent as well. However, it has to be observed how long lasting this price correction is. This will influence the flow of milk in the domestic market and the level of production of dairy products accordingly.

According to Rabobank, tighter margins and slower production growth is expected in 2026. With the emerging Iran war disrupting trade, geopolitical and economic factors will remain key risks to market stability.

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