The price of milk!

As a dairy vet, I meet a lot of dairy farmers. There are two topics of conversation which punctuate my days: the weather (of course!) and the price of milk.

Well, that's not quite true - when the price is good, as it has been for nearly all of 2025, and for a good chunk of 2024 beforehand, strangely enough the subject is never mentioned! But as soon as there's a dip, it unleashes a barrage of misery and despair. "We are price takers, not price makers" and "Bloody supermarkets are ruining the job" and "This country, I tell you, it is going to the dogs!" - these are all common themes.

My wife, Laura, tells me that I sound a bit like that when I get a cob on too. So perhaps it is a man-thing. We do like to have a moan and offload, and dairy farmers are no different. Come to think of it, it is only the male dairy farmers who I have heard grumble about the milk price in this way, so maybe my theory has some legs.

In the supermarkets, milk prices have climbed significantly over the past five years, along with most foods. If you track these things, you'd now pay £1.65 for four pints in Sainsburys, whereas in 2020, at the start of Covid, you'd have paid just £1.10. That's an increase of nearly 60% - well above the average inflation rate over the same period.

Dairy farmers, meanwhile, have seen a significant price increase. In January 2020, the farmgate milk price was around 29 pence per litre - and during 2025 it averaged about 45 pence per litre. This is a rise of 55% - tracking closely with your shopping basket. Yes, input costs like fuel, fertiliser and feed rose too, but at the end of 2024, these eased back a little. So there was a time when the margins for farmers were genuinely good.

Let me make a short point here - it forever amazes me just how cheap cows' milk is to buy. Much cheaper than coca-cola, lemonade, oat milk, or bottled water! And that's after the processors and supermarkets have had their cut. Take that 4 pints (2.27 litres) from Sainsburys - it costs you £1.65, and the amount paid to the farmer is about £1. That such a delicious and nutritious drink can be bought for such a low cost, knowing as I do all the hard work that goes into it, and the fact that it is produced biologically, by cows, rather than in some inanimate vats and mixers in a factory, it is frankly mind-blowing. Drink more milk - it is incredible value!

Anyhow, moving away from that sales pitch, let's turn attention to the present, now that the farmer grumbles are coming thick and fast. Since around October, there's been a sharp price reduction paid to farmers. The current farmgate milk price sits around 32-35 pence per litre. For some unlucky farms, it'll be lower still. I don't like to simplistically blame the supermarkets or the processors - it's just plain economics of supply and demand. The good prices in 2025 were driven by high demand and low supply: Bluetongue (a viral disease affecting cows) in Europe had hit production; a dry Summer meant some farms were under-producing, and the good weather meant more people were eating strawberries and cream (no, really - it made a difference!). Farmers kept more cows and fed more corn, making hay whilst the sun shined, literally, and then we quickly tipped into an over-supply situation.

The cruel part, perhaps, is that the milk prices tumbled right at the start of Winter, which is the most exensive time to keep cows and produce milk (think power, feed, housing...). Traditionally, milk prices fall in the Spring, when there is a "Spring flush" due to good grass, cows going outside, and many farmers calving a lot of cows around February, meaning many cows are at peak yields to coiuncide with that lovely April/ May grass. It is cheaper - on the whole - to produce milk in the Spring, so farmers can stomach a Spring price drop. And they know to expect it. This winter, however, it has been a bit grim.

I don't panic - and nor should any dairy farmer. This has likely this been a price-correction and by the end of 2026, hopefully the price will stabilise and rise somewhat. Let's hope so anyway. I don't want to start having to put coca-cola on my cornflakes, or artifically whitened vegetable juices in my tea!

Watch this short video by Anna Bowen of Andersons Consulting, explaining the current milk price and some of the factors at play. Anna and I have worked together in recent years to deliver dairy farm economics training for vets, progressive farmers and dairy nutritionists.