Freshways plans to cut its base payment to dairy farmers by 7 pence per liter from Dec. 1, adding pressure as United Kingdom milk prices and output remain below year-earlier levels, Farmers Weekly and The Guardian reported.
The outlets said Freshways had raised its rate by 9 pence per liter across September and October, so the planned reduction would reverse most of those increases. The new 29.4-pence rate is before bonuses. Farmers Weekly reported that a 1-pence sustainability bonus and a standard 0.6-pence volume bonus would bring the payment to 31 pence per liter; higher-volume suppliers may have different terms.
Freshways cited weaker dairy markets and poor returns on liquid milk, according to the two outlets. Managing Director Bali Nijjar told Farmers Weekly that anticipated market improvements had not materialized and costs had risen. “We would rather be clear with our farmers now than make a series of smaller reductions through the winter,” Nijjar said.
The Agriculture and Horticulture Development Board (AHDB) reported that UK bulk cream averaged £1,528 per tonne from Sept. 28 to Oct. 31, 2026, down 11% from September. Butter averaged £3,300 per tonne, down 7%. AHDB cited weaker demand for cream and high butter stocks.
The Department for Environment, Food and Rural Affairs (Defra) put the September 2026 UK average farm-gate milk price at 38.45 pence per liter, 16% below September 2025. Milk output was 1,198 million liters that month, down 2% year over year.
AHDB forecast Great Britain’s milk production would fall 2.2% in the 2026/27 season, to 12,737 million liters. It cited low forage stocks, declining cow numbers, production costs and disease risk. AHDB’s account of recent market history traces a sharp milk-price decline to October 2025, when global oversupply and weak commodity markets weighed on prices.
The lower base rate reduces the core payment to Freshways suppliers; contract terms and bonus eligibility will affect each farmer’s final rate. Ian Harvey, a dairy farmer and chair of the National Farmers’ Union’s dairy board, told The Guardian, “Milk is leaving the farm at a loss.”
Defra’s next monthly milk-price update is scheduled for Nov. 26, 2026, at 4:30 a.m. ET (09:30 GMT).
