Freshways, one of the UK’s largest liquid milk processors, will cut the price it pays farmers by 7p a litre from 1 December, reversing most of the increases it made this autumn to secure supply after the summer drought.
The processor’s standard litre price will fall from 38p to 31p, an 18.4% drop, according to Ian Potter Marketing Services. Freshways raised its standard price from 29p to 32p in September and to 38p in October. Farmers Weekly reports that the new price is made up of a 29.4p base price plus sustainability and volume bonuses, and remains 2p above the level paid between February and August.
FarmingUK estimates that a farm producing one million litres a year would lose about £5,833 a month, or £70,000 over a full year, if production and payment terms stayed the same.
Freshways managing director Bali Nijjar told Farmers Weekly that expected improvements in dairy markets, particularly for dairy fat, had failed to materialise. “We would rather be clear with our farmers now than make a series of smaller reductions through the winter,” he said. AHDB figures cited by the processor show bulk cream prices fell 11% between September and October, to £1,528 a tonne, while UK butter prices fell a further 7% in October.
Market analyst Chris Walkland of the Walkland Partnership described it as “a brutal cut” and said further reductions in January could not be ruled out if commodity prices did not recover.
The cut lands as supply tightens. AHDB expects milk deliveries in Great Britain to fall 2.2% in the 2026/27 milk year, to about 12.74bn litres, citing reduced forage, higher production costs, falling cow numbers and bluetongue. Defra figures show the average UK farmgate milk price was 38.45p a litre in September, 16% lower than a year earlier.
Other processors have moved less sharply, according to Farmers Guide: Arla’s conventional price falls by 0.45p to 40.41p for November, and Müller holds at 37.5p for November and December.
Dairy farming underpins employment, contractors and land management across rural England and Wales, and sudden swings in milk income feed directly into local spending and investment decisions over the winter.
