North East farmers warn low milk prices could push them out of business

Farmers across the North East are warning that falling milk prices may force some out of the industry.

They say a combination of high supply and weakening demand is continuing to put pressure on producers.

Prices have dropped sharply in recent weeks and experts expect the trend to continue for months. While supermarket prices are anticipated to remain stable in the short term, smaller producers say they are already feeling the strain.

Milk prices are falling because there is too much supply in the system and not enough demand. The impact on farmers varies depending on their contracts.

But one operation in Aberdeenshire has watched its returns decline and on one occasion was even told to pour milk away when buyers could not purchase it.

Dairy farmer Gordon Taylor told STV News: “Last year we were being paid 39p per litre and now it’s down at 33p and set to get worse.”

Over the past decade, the number of dairy herds in Scotland has decreased by around a fifth, even as the total number of dairy cows has risen.

That’s a sign that large farms are expanding while smaller ones struggle to keep up. Many smaller operations say they cannot absorb additional costs as easily.

At the same time, the number of companies buying milk from Scottish farmers has fallen in recent years, prompting concerns about limited competition in the market.

Taylor added: “Everybody is going to get squeezed but it’s the same old story those at the bottom are going to get squeezed more, they don’t have as much to squeeze.

“We need a new milking parlour but I’m not going to spend a quarter of a million pounds to get a new one if I think my contract might be dropped next year.”

Industry analysts warn that milk prices are determined by global factors, meaning the current downturn is unlikely to reverse quickly. The low price is expected to persist for the foreseeable future.

As farmers deal with falling payments, questions remain about what this means for shoppers.

Catherine Paice from the Dairy Industry Newsletter said: “I think they will be staying the same in the next month or so, but perhaps around Christmas time and New Year we’ll see a change. It’s likely to affect corner shop markets more.”

Farming unions say they will continue to push for fairer pricing and greater transparency across the UK milk market.

But with rising costs, limited competition, and continued volatility, some farmers fear those efforts may not be enough to secure their future in the industry.