Dairy farmers across south-west England are facing “significant pressure” as a combination of escalating operational costs and falling market prices forces many producers to the edge of profitability. Industry data currently reveals a stark economic reality: farmers are receiving an average of 34p per litre for their milk, while the cost of production in many cases exceeds 40p per litre.
The Drivers of Industry Strain
The National Farmers’ Union (NFU) points to several interconnected global factors that have created this “tough period” for the dairy sector. Key contributors to these rising production costs include:
- Geopolitical Conflict: Ongoing conflicts in the Middle East have driven up the prices of essential inputs, specifically fuel, feed, and fertiliser.
- Global Market Dynamics: A period of strong global milk production has contributed to the softening of prices paid to farmers.
Stephen Dark, chair of the NFU South dairy board, noted that the sector can only withstand such “significant loss” for a limited amount of time. This financial strain is already causing a decline in the number of active producers; Dark reports that he is aware of farmers who have recently decided to sell their herds and exit the industry entirely due to the unsustainable margin pressure.
Life on the “Knife Edge”
For producers like Dan and Liz Nattle of Tremore Dairy near Bodmin, the current climate is both mentally and physically draining. While the Nattles have managed to stay afloat by operating a lower-cost system—relying on grazed grass rather than expensive concentrated feeds—they describe their current financial situation as being on a “knife edge”.
“There are dairy farmers across the south west with different systems that are really under pressure—and some are saying their cost of production is 10p more than what they’re getting for their milk,” Liz Nattle explained.
Innovation as a Lifeline
To combat these market challenges, some farmers have turned to diversification. Two years ago, the Nattles installed a milk vending machine on their farm, which also offers milkshakes and ice creams. Liz Nattle notes that the initiative has grown in popularity with both locals and tourists, serving not just as a revenue stream, but as a way to “put a value on milk” and educate the public on the realities of dairy farming.
Despite these innovative efforts, the broader industry remains in a precarious position. The NFU has expressed deep concern that if these current market conditions persist, the agricultural landscape of the south-west could see a continued exodus of dairy farmers.
Frequently Asked Questions (FAQ)
Q: Why are production costs currently higher than milk prices for many farmers? A: Farmers are receiving an average of 34p per litre, while rising global costs for fuel, feed, and fertiliser—largely driven by conflicts in the Middle East—have pushed production costs above 40p per litre in many instances.
Q: What is the emotional impact of the current dairy crisis? A: Producers have described the market conditions as “very draining, mentally and physically,” leading some to question the long-term viability of staying in the industry.
Q: How are some farmers adapting to the current financial pressures? A: Some producers are diversifying their business models. For example, some farms have installed on-site milk vending machines to sell milk, milkshakes, and ice cream directly to consumers, which helps increase margins and educate the public on production costs.
Q: Is the problem isolated to specific types of farms? A: No, farmers utilizing various systems are under pressure, though those who rely heavily on “bought-in” concentrated feed are particularly vulnerable compared to those utilizing low-cost systems like grazed grass.
Sources
- Melville, T. (2026, June 3). Rising costs putting dairy farms ‘under pressure’. BBC News.
