Irish milk production accelerates while UK output growth slows down in January

Milk production in the United Kingdom and Ireland started 2026 with solid year-on-year growth, despite the seasonal lows typical for January. Rising milk solids, supported by stronger fat and protein levels, indicate that growth in valuable components is outpacing increases in liquid milk volumes. While production growth has slowed in the United Kingdom, it has accelerated in Ireland. At the same time, expanding supply has put pressure on farm gate prices, tightening farmer margins in both markets. Milk production in the United Kingdom reached 1.33 billion liters in January, growing by 4.1% compared to the previous year. Despite the notable monthly expansion, production growth has slowed over the past three months since October, when output growth reached 7% year-on-year.At the same time, increased nutrient content in milk has supported production further. Fat levels increased to 4.45% (+0.05 percentage points) and protein averaged 3.53% (+0.11 percentage points). As a result, growth in milk solids outpaced the increase in liquid milk volumes, rising by 6.2% year-on-year, although this also reflects a gradual slowdown over the past three months.While the solid growth at the start of the year provides an early signal for 2026 production trends, January remains one of the lowest production months of the year. During winter, grass growth in the region is typically at its lowest. The Agriculture and Horticulture Development Board (AHDB) reported average pasture growth of 6.22 kg of dry matter per hectare by the end of February. Production normally rises steadily towards its seasonal peak in May, when pasture growth averages around 78.8 kg of dry matter per hectare based on data from 2019 to 2024.The expansion in production over the past year has placed considerable pressure on milk prices. Farm gate prices averaged 37.75 pence per liter in January, declining by 5.2% compared to the previous month and by 17.8% year-on-year. This marks a sharp reversal compared with the 19.5% annual increase recorded in January 2025. Year-on-year price growth turned negative in October and has since accelerated downward, reaching the largest annual decline in more than two years.In contrast, lower feed costs have provided some support to milk production. Feed prices declined by 4.2% year-on-year to £291 per ton in December. Lower feed costs may partly offset the impact of declining milk prices, although overall farm margins remain under pressure and market signals suggest farmers remain cautious about expanding production.IrelandIreland’s milk production totaled 174,430 tons in January, a decline of 34.8% compared to the previous month but an increase of 4.2% compared to the previous year. Output growth in the country accelerated compared with the 3% contraction recorded in December, suggesting a potential recovery in production at the start of 2026 despite January typically representing the lowest monthly production level of the year.Although the nutritional content of milk declined compared to the previous month, it increased year-on-year, reaching 4.63% for fat (+0.12 percentage points) and 3.65% for protein (+0.07 percentage points). This resulted in a 6.7% year-on-year increase in milk solids, reaching 14,440 tons in January.High milk availability has weighed on prices for the past six months, although the decline appears to have stabilised in January. Most dairy cooperatives maintained their prices in January, offering some relief to farmers, although overall margins remain under strain. The base milk price has declined by more than 15 cents per liter compared to the previous year, averaging around 35 cents per liter in January. This represents a sharp decline from the 48 cents per liter recorded last June, just before prices began to fall rapidly.Agriland estimates production costs at more than 37 cents per litre, implying that many farmers are producing milk below cost when considering the base milk price alone. Many farmers therefore rely on strong calf sales to support cash flow in early spring. These pressures may influence milk supply if farmers decide to limit production to control costs.