Business and Policy March 2026 – Milk

2 March 2026

Milk production data

Milk production continues to stay ahead of last year, with GB milk volumes for January 2026 reported at an estimated 1,330 mlitres. This is a 0.9% decrease on December 2025 and a 4.1% increase on January 2025. The latest data from AHDB puts daily production at 35.07mlitres for the week ending 14th February. This is 0.6% higher than the previous week and 4.2% higher than the same week in 2025. UK production for January was estimated at 1,329 million litres, 2.62% more than in January 2025.

Farm-gate prices

The Defra farm-gate milk price for January 2026 was 37.75ppl, down 2.54ppl from the December 2025 price (5.2%) and 18% less than 12 months ago. At the time of writing, while First Milk, Laclatis, Grahams and Arla have announced a price hold for March; with milk collections remaining well above the levels at this point last year, Muller has announced a 1ppl cut for March. Organic milk prices are currently around 56ppl depending on the contract.

Going forward, First Milk have announced a price increase from 1st of April 2026 of 0.5 ppl in recognition of the “considerable pressure on farming businesses”.

Milk Prices for March 2026 Scotland		Standard Ltr ppl
First Milk²		March	30.25
Müller - Müller Direct - Scotland ^1, 3		March	34.50
Grahams¹		March	34.50
Arla Farmers²		March	35.73
Lactalis / Fresh Milk Co.²		March	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

Despite continuously rising milk yields and building stocks, the commodity market has seen some recovery in February. As the spring flush is looming on the doorstep, it will be interesting to see if this is a substantive or fleeting change.

Bulk cream prices have seen a £64/tonne rise over the reporting period and now average £1,249/tonne. Although the price has improved, it is still being held back by the surplus of milk and milk fats, both at home and on the continent.

Mild cheddar has seen a modest £60/ tonne price rise and sits at £2,920/tonne. Butter experienced some market volatility in early February but has remained mostly flat.

Buyers have recognised that the market has bottomed out which has driven a small upswing in demand. Prices have been reported as competitive with the likes of NZ, which may open the door to export opportunities and support recovery further. The average price for butter for the period was £3,670/tonne, an increase of £70/tonne.

SMP continues to climb following a positive start to the year. Prices are competitive globally and a strong export market has been reported. As the price continues to grow, buyers are keen to secure product now, before further price rises occur. The average price was reported to be £2,040/tonne, which is a 13% rise on the previous period, the largest seen amongst all commodities this month.

Given the slight recovery in the price of cheddar, the MCVE value has risen by 0.9ppl and the AMPE value has seen a modest rise of 2.7ppl off the back of increased demand for skimmed milk powder. The milk market value indicator (MMV) has seen an increase of 1.3ppl in February, rising from 31.4ppl to 32.7ppl. The latest GDT auction (17th February 2026) resulted in the price index moving upwards by 3.6% to a weighted average price across all products of $4,028/t.

UK dairy commodity prices (£/tonne)	Feb 2026	Jan 2026	Aug 2025
Butter	3,670	3,600	6,050
Skim Milk Powder (SMP)	2,040	1,810	1,990
Bulk Cream	1,250	1,185	2,730
Mild Cheddar	2,920	2,860	3,830

UK milk price equivalents (ppl)	Feb 2026	Jan 2025	Aug 2025
AMPE	32.75	30.09	44.8
MCVE	32.71	31.8	43.3

Oat-based products cannot be sold as ‘milk’

The Swedish company Oatly has been in a lengthy court battle with Dairy UK for a number of years now on whether the trademark phrase ‘Post Milk Generation’ was invalid, and if the word ‘milk’ can be used to describe their oat based products.

The High Court allowed Oatly’s challenge to go to High Court in 2023, and again, to the highest court in 2025, with their lawyers arguing that the trademark made clear that there was no milk in the products. Oatly lost their legal battle earlier this month, with the Supreme Court unanimously ruling that the trademark was invalid.

Dr Judith Bryans, CEO of Dairy UK, said: “We are delighted that the Supreme Court upheld the earlier decision of the Court of Appeal, confirming that Oatly’s trademark ‘Post Milk Generation’ contravened the rules protecting reserved dairy terms. This ruling is an important decision for the sector, as it finally provides clarity on how dairy terms can – and cannot – be used in branding and marketing. It brings greater certainty for businesses and helps ensure that long-established dairy terms continue to carry clear meaning for consumers, while allowing appropriate descriptors to be used where the law permits.”

UK dairy and meat exports hit over £4 billion

Latest figures from HMRC show that the total value of UK dairy exports in 2025 realised £2.2 billion, a massive 16.6% increase on 2024 dairy exports. Red meat exports reached over £2 billion, a 12% increase on 2024 figures.

The importance of the EU was stressed, with shipments to markets in the trade blocs accounting for almost 74% of the total value of UK dairy exports. These figures followed a busy year for the AHDB International Trade Development Team, with the dairy sector team delivering 28 events from Singapore to San Diego.

Keira Sannachan; Keira.Sannachan @sac.co.uk