The Royal Association of British Dairy Farmers (RABDF) is warning of a tough winter ahead for dairy farmers as the gap between farmgate milk and retail prices and high input costs adds significant financial pressure. 

Government figures show the average UK gate price for milk was 36.48 pence per litre (ppl) in June, down 16% in 2022, on the same month last year. However, the current cost of production is estimated to be between 40ppl and 45ppl, making it unsustainable for many farmers. 

RABDF Chairman Di Wastenage says farmers are caught in the crossfire, with little let up for farmers forecast in the short-medium term. 

"The difference between the farmgate milk price and retail price is currently a very live issue on farm for our members. Our dairy farmers are facing enormous financial pressures. They are caught in the crossfire with farm gate milk prices remaining low, while farm input costs are stubbornly high and high retail prices impact consumer demand too. 

"We recognise UK processors also continue to face high energy and labour costs, which are reflected in these results. The key difference in the current retail price of cheese is because it is manufactured using higher cost milk from earlier in the year." 

Mrs Wastenage added: "Looking to the next six months, the global markets offer little positivity for dairy farmers in the UK. The downturn in demand for whole milk powder (WMP) from China and the forward forecasting from Fonterra suggest this is going to become an uncomfortable year. Sadly, for many, this may be financially unsustainable," she warned. 

Ms Wastenage added: "The UK needs a dairy industry from the farmgate to the supermarket shelf to operate efficiently and profitably for all sectors along the supply chain. We must ensure this happens and that the value is shared with all parties."