What is influencing UK dairy markets?

UK farm-gate milk prices have been slowly reducing over recent months. Here we look at the challenges facing the industry, which vary for different products and supply chains.

UK farm-gate milk prices have been slowly reducing over recent months, one liquid processor has gone into administration while another has raised concerns about excess milk. Some cheese makers have informed their suppliers of milk pricing changes, and the organic sector has highlighted issues that will impact on their revenue in the future.

The challenges facing the industry are not necessarily common across all areas, with some impacts felt only on specific products or supply chains. These are summarised below and in the graphic:

Potential loss of export markets as a result of the US Airbus tariffs and fear of no-deal Brexit;
Falling fat prices and their impact on processor margins, particularly for the liquid sector;
Increases in milk production in certain regions which has not been matched by increases in processing capability.

More details for each of these challenges can be found in previous analysis below.