According to a new report from the AHDB, milk production in Britain is forecast to increase by 1.1% in 2025.
While growth was sluggish at the start of 2024 due to the wet spring, reduced yields and lower prices, things turned around in September as prices climbed and margins improved.
The favourable weather enabled producers to keep cows out in the field longer, contributing to increased yields, with milk deliveries increasing by 4.5% and 3.3% in November and December, respectively.
Susie Stannard, AHDB senior analyst (dairy) said: “After a tough start to the season, the industry is showing signs of recovery. Higher milk prices and a stronger milk-to-feed ratio are encouraging farmers to boost production.
“We’re seeing solid growth, but we must also be mindful of global risks, from fluctuating commodity prices to disease outbreaks, which could disrupt this upward trajectory.”
Milk prices are set to remain high in the short term, averaging 45.14ppl, however, the AHDB warns that increased production could put pressure on pricing towards the spring flush.
Retail demand is expected to remain stable, although the per-household volume could decline slightly as more workers return to the office. Cheese demand is expected to grow, with promotions and the popularity of home cooking driving this, although butter demand could drop as plant-based alternatives continue to be priced competently.
Susie adds: “The dairy sector has demonstrated resilience in the face of significant challenges. However, the industry’s ability to navigate these uncertainties will depend on how well it can balance production increases with fluctuating demand and external pressures.”
