Business and Policy February 2026 – Milk

Milk production data 

Domestic milk production continues to rise, with a GB production figure of 34.87mlitres for the week ending 17th January 2026.  This is 0.6% higher than the previous week and 3.5% higher than the same week in 2025 (an extra 1.18 mlitres daily).  While the estimated GB milk volume for December 2025 was 1,343 million litres; the realised production figure was a million litres higher at 1,344million litres.  This is an increase of 4.3% on the November 2025 production figures, and a 5.2% increase on December 2024.  The favourable milk to feed price ratio has no doubt helped drive production over the last few months – the highest in 20 years.   

 

 

Farm-gate prices 

The Defra farm-gate milk price for December 2025 was 40.29ppl, down 2.62ppl from the November 2025 price, a reduction of 6.1% over the month and 13% less than 12 months ago. A number of processers have announced further price drops, such as the First Milk price coming back by 2ppl, Muller by 3ppl and Arla by 1.75ppl.  

 

Milk Prices for February 2026 Scotland		Standard Ltr ppl
First Milk2		Feb	30.25
Müller - Müller Direct - Scotland 1, 3		Feb	35.5
Grahams1		Feb	34.5
Arla Farmers2		Feb	33.98
Lactalis / Fresh Milk Co.2		Feb	29.27
1	Liquid standard litre – annual av. milk price based on supplying 1m litres at 4.0% butterfat, 3.3% protein, bactoscan = 30, SCC = 200 unless stated otherwise.
2	Manufacturing standard litre - annual av. milk price based on supplying 1m litres at 4.2% butterfat, 3.4% protein, bactoscan = 30, SCC = 200 unless stated otherwise.
3	Includes 1.00ppl Müller Direct Premium.  Haulage deducted depending on band for 2023 vs 2021 litres, ranging from -0.25 to -0.85ppl.

 

Dairy commodities & market indicators 

January 2026 has brought a more mixed picture on commodity markets compared to what has been reported in recent months.  The skim and cheese markets have seen a slight recovery over the Christmas period into January.  Fats have not fared as well, and the market seems to be heavily influenced by high levels of milk supply both at home and on the continent.  

Bulk cream is still experiencing extreme pressure and lost, on average, a further £127/tonne.  The price of cream fell as low as 70p/litre over the Christmas period in a bid to ease off supply pressures. 

Butter prices appear to be disjointed from cream, as they fell at a slower rate of £110/t and have experienced a small level of recovery.  

There are few movements in the mild cheddar markets, with reports that supply is tightening marginally.  This has increased the value of cheddar by £30/t.  Skimmed milk powder is outperforming the other commodities as the value has risen by £80/t.  Demand has risen due to buyers believing the market has bottomed out.   

Given the slight recovery in the price of cheddar, the Milk for Cheese Value Equivalent (MCVE) value has risen by 0.4ppl and the Actual Milk Price Equivalent (AMPE) value has seen a slight rise of 0.2ppl off the back of increased demand for skimmed milk powder.  The latest Global Dairy Trade (GDT) auction on the 20th of January 2026 resulted in the price index moving upwards by just 1.5% to a weighted average price across all products of $3,615/t.  

 

UK dairy commodity prices (£/tonne)	Jan 2026	Dec 2025	July 2025
Butter	3,600	3,710	6,150
Skim Milk Powder (SMP)	1,810	1,730	1,970
Bulk Cream	1,185	1,312	2,774
Mild Cheddar	2,860	2,830	3,890

UK milk price equivalents (ppl)	Jan 2026	Dec 2025	July 2025
AMPE	30.1	29.9	45.1
MCVE	31.8	31.4	43.90

 

© AHDB [2025].  All rights reserved. 

 

Müllers UK expansion plans 

As the global demand for dairy products is set to rise over the next coming decade, Muller has announced their expansion plans for the West Lancashire site in England.  The investment should see a significant boost in site capacity in order to strengthen their position as a major producer and exporter of British dairy products.  Part of the expansion involves building an in-house logistics hub which will be able to accommodate 65 milk tankers to support in the collection of raw milk from farms.  

 

Weight loss drugs reshaping demand for dairy and meat products 

The rise in use of weight loss drugs in the UK has the potential to reshape the level of demand for both dairy and meat products.  Shoppers are prioritising smaller portion sizes, whole-foods, and higher levels of protein in their diet.  Research from Wordpanel by Numerator shows that 4.1% of UK households were using weight loss drugs in 2025; this number is expected to rise in 2026.  

A YouGov/AHDB survey found that 26% of consumers plan to reduce their intake of ultra-processed foods, with 14% reporting that they would like to increase their protein intakes.  AHDB believes that the ongoing changes in consumer behaviour linked to weight management and health goals presents an abundance of opportunities for the industry.  Lean cuts of meat are increasingly promoted as affordable sources of protein, with the dairy sector highlighting probiotics, nutrient density, and sustainable production.  

Kiera Sannachan, Keira.Sannachan @sac.co.uk