Two of the UK’s major milk processors — Arla and Müller — are cutting farmgate prices as soaring global milk volumes continue to force markets downward and squeeze returns for dairy producers.
From 1 December, Arla’s headline price for conventional milk will fall by 3.50ppl to 39.21ppl, while its organic price will remain unchanged at 57.95ppl.
Milk supplies are rising sharply across both global and EU markets, while retail and industrial demand remains stable.
As processors struggle to find short-term outlets for the additional volume, market prices are adjusting down and the outlook remains under pressure due to sustained oversupply.
Arla said the organic market is currently more stable, with supply and demand “in balance, for now”.
Müller has also announced a reduction. Dairy farmers supplying the processor and meeting the conditions of its Müller Advantage scheme will receive 38.5ppl from 1 January 2026 — a cut of 1.5ppl.
Richard Collins, agriculture director at Müller Milk & Ingredients, said: “Unfortunately we can’t ignore the continued pressure that is evident across dairy markets.
"We’re seeing market price reductions and daily collection volumes are still significantly higher than they were last year.” He added that the company is “keeping a close eye on supply and demand.”
The price reductions underline a challenging outlook for the UK dairy sector heading into winter. Analysts say milk production has rebounded faster than demand in several key markets, putting downward pressure on farmgate returns.
For many British dairy farmers, the cuts mark a further squeeze on already tight margins amid high input costs, weaker exports and static retail demand.
Analysts expect milk prices to remain under pressure into early 2026 unless global demand strengthens or production levels ease.
