(1).jpg "Dairy Food and Farming Update")
August 2026
- UK milk production is beginning to ease in line with seasonal declines, with output tracking below last year’s levels since mid-April. Tightening supplies, combined with stronger commodity markets and skimmed milk powder values, have prompted some processors to increase their prices, with Arla and Saputo announcing rises to 37p/litre for July and August.
- Tighter milk supplies and rising spot market values have prompted NFU Scotland to call for increases in farmgate milk prices. While spot prices have risen to around 50p/litre, the NFU reports that some producers received as little as 22p/litre for June milk after transport costs were deducted. NFU Scotland argues that stronger market conditions should be more clearly reflected in producer returns.
- The recent heatwaves have impacted UK milk production, with dairy cows particularly vulnerable to heat stress. The high temperatures experienced during late May and June are estimated to have led to a reduction in milk output of around 12.5 million litres. While this reduction in supply is thought to have provided short-term support to the market, strong global production from key export regions including New Zealand and the US is likely to limit any significant sector bounce-back.