British dairy farmers face continued uncertainty over milk production, rising costs and winter forage availability
UK butter supplies fell by 7.6% in the second quarter of 2026, while cheese availability dropped 3.3% as declining milk production and changing trade flows placed further pressure on the dairy sector.
New figures published by the Agriculture and Horticulture Development Board (AHDB) on Thursday (8 October) show that UK milk deliveries fell 1.1% year-on-year to 4.16 billion litres between April and June.
AHDB identified severe heat stress, poor forage growth and the emergence of bluetongue in south-west England as factors affecting production, with sharper declines in milk deliveries recorded in some regions.
The figures reveal that available butter supplies fell by 4,900 tonnes compared with the same period last year, while cheese availability declined by 6,900 tonnes.
Available supplies are calculated from domestic production, plus imports and minus exports, rather than the amount of product held in retail stocks.
Butter production fell by 4.3%, equivalent to 2,600 tonnes, during the quarter, with AHDB reporting that market conditions made processing cream into butter less economically attractive.
Lower imports also contributed to the reduction in availability, continuing the downward trend recorded during the first quarter of 2026.
Cheese supplies faced similar pressures, although strong international demand played a particularly significant role.
UK cheese production declined by 2.3%, or 3,200 tonnes, as reduced milk deliveries affected the volume available for processing.
Meanwhile, cheese exports surged by 15.3%, equivalent to an additional 8,000 tonnes, reaching an all-time quarterly high.
The strongest increases were recorded in markets including the Netherlands, France and Belgium, alongside growing shipments to China and countries across the Middle East and North Africa.
However, higher export volumes did not translate into increased export earnings.
Separate AHDB trade analysis found that the value of UK cheese exports fell by 4% during the quarter, despite record volumes, reflecting weaker global commodity prices.
Although cheese imports increased by 3.6%, the additional supplies were insufficient to offset lower domestic production and stronger overseas sales.
The figures come amid growing concern over the outlook for British dairy farmers, with AHDB warning that milk production could contract further in the coming months.
The levy board said the pace of any decline would depend on farmgate milk prices, the impact of bluetongue, weather conditions and the availability of winter forage.
The national milking herd has also fallen to its lowest recorded level, limiting the potential for a rapid recovery in production.
At AHDB's latest Milk Forecasting Forum, held on 6 October, industry representatives raised concerns about rising fertiliser and fuel costs, replacement heifer availability and the potential longer-term impact of summer heat on cattle fertility.
Questions were also raised about how bluetongue could affect dairy herds and milk yields, including the availability and uptake of vaccination.
These pressures could influence production decisions over the winter, particularly where farmers face higher costs and uncertainty over future milk prices.
AHDB is expected to publish an updated milk production forecast later in October, providing a clearer indication of the outlook for the 2026/27 season.
The latest figures highlight the challenges facing dairy producers and processors as they balance falling domestic milk supplies, international demand and continued uncertainty over production costs.