UK Milk Surge Triggers Sharp Commodity Price Fall

Milk supplies in the UK have surged far beyond normal levels, putting sharp downward pressure on dairy commodity prices, according to the latest report from the Agriculture and Horticulture Development Board (AHDB). Great Britain’s milk output for the current year is up 5.3% (331 million litres) compared to last year, while total UK milk production has risen 6.0% (455 million litres). The oversupply has led to steep price corrections across key commodities: butter dropped by £601/t to £4,680/t, bulk cream by £143/t to £1,986/t, mild cheddar by £310/t to £3,110/t, and skim milk powder (SMP) by £90/t to £1,820/t.

This decline has also pulled down the milk value indicators. The Arithmetical Milk Price Equivalent (AMPE) now stands at 35.9 ppl, the Milk Commodity Value Equivalent (MCVE) at 34.6 ppl, and the Minimum Milk Value (MMV) at 34.9 ppl. AHDB analysts note that MMV has fallen 10 ppl since summer and 13.5 ppl since October 2024, suggesting farm-gate prices could dip by 7 ppl in the coming months if supply growth continues unchecked.

Industry Insight:
The UK’s situation highlights the global dairy market’s delicate balance — a sustained rise in milk supply without matching demand is exerting pressure on commodity prices worldwide. For Indian exporters, this underscores the need to shift from bulk exports to value-added, differentiated dairy products, focusing on quality, innovation, and market-specific formulations to withstand international price volatility.

Source : DAirynews7x7 Nov 1st 2025 AHDB