Strong production helped lift margins, but higher fuel, fertiliser and labour costs continue to put pressure on farms
Record milk yields were achieved by conventional Holstein/Friesian herds in 2025/26 despite drought, volatile milk prices and mounting input costs, according to new analysis.
Average yields climbed 5.8% year-on-year to a record 8,848 litres per cow, while farmers also fed a record 2,997kg of concentrates per cow, up 4% on the previous year.
The figures come from Kingshay’s Dairy Costings Focus 2026 report, which draws on data from 1,089 conventional herds and 88 organic herds.
Milk from forage also increased, rising 9.5% to 2,652 litres per cow despite difficult growing conditions in parts of the country.
Stronger production helped lift margin over purchased feed by 3.2% to £2,708 per cow.
Overall herd margin over purchased feed increased by more than 4% to a record £614,898, although Kingshay said the extra margin was needed to absorb rising costs elsewhere, particularly labour and machinery.
Milk prices, meanwhile, showed considerable volatility through the year.
Average prices for conventional Holstein/Friesian herds stood at 41.74p per litre, down 1.12p on 2024/25 but still the third-highest annual average on record.
Production was particularly strong at the start of the milk year, with average prices at 45.24p per litre. Spring milk volumes were so high that the UK lacked sufficient processing capacity in some cases and some milk had to be discarded.
The market later turned sharply as global production increased and dairy commodities became oversupplied.
Average farmgate values fell to 33.38p per litre in April 2026 before beginning to recover as drought and forage shortages reduced summer milk production.
Kingshay said: “The only certainty seems to be that volatility, in every form, is here to stay.”
Input costs created further pressure during 2026, with conflict in the Middle East and the closure of the Strait of Hormuz contributing to sharp increases in fuel and fertiliser prices.
White diesel peaked at 192p per litre in April and red diesel reached 118p per litre, while UK bagged ammonium nitrate climbed from £402 per tonne in February to £529 per tonne in April.
Labour has also become increasingly expensive, with Kingshay reporting a 51% increase in labour costs over the past five years.
While 2025/26 delivered record yields, the outlook remains challenging as producers contend with further forage shortages following this summer’s drought.
Kingshay said many farmers may need to increase forage storage capacity to provide a buffer against future shortages, although doing so would bring additional costs.
The report suggests producers will continue to face a balancing act between maintaining high milk output, controlling feed costs and building greater resilience against increasingly unpredictable weather and market conditions.