UK dairy production remains strong amid record milk supply
Butter supplies tighten slightly due to lower imports, AHDB says
29 January 2026
1 minute read
By: UK dairy product supplies showed a mixed picture in the third quarter of 2025, as strong milk production supported higher cheese availability while butter supplies tightened slightly, according to a market report from the Agriculture and Horticulture Development Board (AHDB).
Milk volumes continued to rise in December, supported by favourable farm economics. Milk deliveries in the third quarter (July–September) totalled 3.79 billion litres, up 5.6% from a year earlier, contributing to increased supplies of dairy products.
Cheese supplies continued to build during the quarter, driven by a 5% increase in production, equivalent to 6,500 tonnes. Imports also rose overall, reflecting higher shipments from EU countries including France, Germany and Belgium, despite imports from New Zealand easing later in the year. Cheese exports increased year over year, supported by steady global demand, even as UK cheese prices remained relatively high. With production, imports and exports all rising, available cheese supplies increased by 3%, or 6,400 tonnes.
Butter supplies edged lower despite higher domestic output. Butter production rose 8%, or 3,400 tonnes, compared with the same period a year earlier. Imports fell sharply, down 24% or 3,900 tonnes, while exports increased 8%, or 900 tonnes. AHDB said export volumes remained limited due to uncompetitive UK prices compared with the US. The combination of higher production and exports and lower imports reduced available butter supplies by 3%, or 1,400 tonnes.
Milk deliveries are expected to average 4.9% higher than the previous milk year, based on AHDB’s December production forecast. The increase has added to stocks of dairy commodities, placing downward pressure on prices. AHDB said the extent and speed of any price declines, along with farmers’ production responses, will be key factors shaping future output.
Demand conditions remain uncertain amid ongoing inflation and a weak macroeconomic outlook. Rabobank forecasts that milk production growth will extend into early 2026, further pressuring prices. AHDB said trade developments, including recent US tariffs and EU-China tariff measures, will be important factors influencing dairy trade flows.
