Yorkshire dairy farmer ‘losing £1,800 a day’ due to global milk glut
A leading Yorkshire dairy farmer has revealed he is losing £1,800 a day due to a glut in global milk supplies.
Chair of the National Farmers Union Dairy Board Paul Tompkins, who farms 500 pedigree Holsteins in the Vale of York with his wife, Rachael, supplying Boroughbridge-based Paynes Dairies, believes four in five of UK dairy farmers are in a position where the price of milk is less than the cost of production.
The Agriculture and Horticulture Development Board (ADHB) said more than seven per cent extra milk was produced by British farmers in the final three months of 2025 compared with the five-year average. For the first time this year, UK milk production is forecast to top 13 btillion litres.
However, the glut is partly linked to last year’s dry spring, leading to a lack of grass for grazing and dairy farmers using animal feed which meant well-fed cows producing record-breaking fat and protein, meaning even more product was coming off every litre.
Some industry analysts have pointed towards dairy markets becoming flooded with milk from UK producers as well as from producers in North America, Europe, New Zealand and Australia.
Mr Tompkins said as a result the majority of dairy farms are facing severe economic pressure after farm gate prices fell from 41p to 42p per litre to as low as 29p, and that some dairy farms would not be able to keep afloat.
He said he can produce milk for about 40p a litre, the national average, adding: "When you operate on thin margins of one or two per cent, it's a significant blow."
The Dairy Board leader said: “Every morning that I roll out of bed at 4.40am, I know I’m losing £1,800 that day, just by getting up.”
Leading dairy concerns, including Stourton-based cooperative Arla has reduced the price farmers receive to around 35p per litre, which is more than 12p lower than last January, while Müller has reduced the price to 38.5p per litre, compared to 42.25p in 2025. The average price this time last year was 46p.
An Arla spokesperson said: “Milk supplies continue to increase significantly, both globally and in EU. At the same time demand from retail and industry is stable.
“Hence, market players struggle to find short-term outlets for the sudden significant milk increase. Market prices are adjusting down due to plenty of milk available. The outlook continues to be negatively impacted by plenty of milk available.”
ADHB said earlier this month Freshways and Payne’s dairies had both reduced their price by 3p per litre.
ADHB figures show in December bulk cream lost around a quarter of its value, butter prices dropped sharply, and skimmed milk powder continued to slide. The industry body said processors struggled to process all of the milk and were also left with more product than the market could comfortably absorb and, unsurprisingly, farmgate prices followed.
ADHB analysts said most signs suggest margins would stay tight through until autumn and 2025/26 was forecast to be a record milk production year.
In November a Private Members’ Bill was introduced to parliament demanding tougher protections for UK dairy producer, from fair pricing and transparent labelling to safeguards in future trade deals.
The move by Liberal Democrat MP Sarah Dyke seeks to ensure the government considers the impact on British dairy farmers in any future international trade negotiations and measures to promote fair dealing between farmers, processors and retailers.