Dairy farmers across the UK are warning that the industry faces collapse after milk prices fell dramatically below the cost of production.
Industry figures show farmers are currently being paid just 32-35p per litre for their milk, while production costs can reach as high as 42-49p per litre.
The gap means the average UK dairy farm is losing around 10p on every litre of milk sold, placing enormous financial strain on farming families.
Ben Yates, a dairy farmer from Frome in Somerset, says the situation has become critical and threatens the survival of the entire industry.
“If we don’t sort out the milk price pretty quickly, there’ll be no industry left,” Yates said, warning that farms are already closing across the region.
Both of Yates’ sons want to follow him into farming, but he warns there will be no future in the industry unless the price gap is urgently addressed.
“We’ve got to have the future. We’ve got to make farming and milk production attractive so that people want to come and be in it, build it,” he said.
His sons Seth and Oscar head straight to the young stock sheds after school each day, preparing prize calves for the Royal Bath and West Show.
Seth is walking a young white Holstein calf called Blaze, who won her class at the North Somerset Show, and says he has “high expectations” for the larger regional competition ahead.
Oscar, who was given his own calf for his 16th birthday, says farming is “part of who I am,” yet their father fears the economics make a farming career increasingly impossible.
The number of dairy farms in the UK has fallen to a record low of 7,010, down from 8,310 in 2020, according to the Agriculture and Horticulture Development Board.
Fewer, larger farms are now producing slightly more milk overall, with the AHDB reporting a 4% increase in total milk production, even as smaller family farms continue to disappear.
Milk prices have swung sharply in recent years, rising to as high as 55p per litre following Russia’s invasion of Ukraine in 2022, before falling back to around 45p by 2023.
A worldwide glut of milk in late 2025 triggered a sharp new price fall, and farmers have been receiving just 32-35p per litre since October, depending on their contract.
At the same time, costs have surged significantly, with so-called red diesel doubling in price after the US began bombing Iran, and fertiliser costs rising sharply on multiple occasions.
“We’ve had these big jumps. It was 50% increase in fertiliser on the Ukraine war, 50% again now, but the milk price isn’t moving and it’s got to,” Yates explained.
Tom Kimber, a tenth-generation dairy farmer whose family has been grazing cattle near Wincanton in Somerset for 350 years, described the situation in stark terms.
“We are price-takers not price-makers,” he said, explaining that farmers are simply told each month what they will receive, with no ability to negotiate or wait for better conditions.
Unlike other businesses, dairy farmers must milk their cows every single day regardless of profitability and cannot store their product until market prices improve.
“Doing another winter at these kind of price gaps is terrifying quite frankly,” Kimber said. “It just can’t be done, and there will be people looking at it and thinking ‘I’m done.'”