UK butter and cheese availability contracts in second quarter

UK butter availability fell by 7.6% during the second quarter of 2026 while cheese availability declined by 3.3%, according to analysis published by AHDB on 8 October. The calculated quantity of butter available to the domestic market was approximately 4,900 tonnes lower than a year earlier, with cheese availability down around 6,900 tonnes. The figures combine changes in domestic manufacturing and cross-border trade rather than counting stock held in shops or warehouses. Reduced milk supply and differing export patterns contributed to the contraction.

Milk deliveries in Great Britain amounted to around 4,164 million litres between April and June, a fall of 1.1% from the equivalent quarter of 2025. Adverse growing conditions, heat and pressure on forage availability affected production, while animal health risks have added uncertainty. The decline in the volume available to processors does not translate mechanically into equal reductions for every manufactured dairy product. Plants can allocate milk fat and protein between products according to contracts, equipment capability, prices and customer requirements.

With those lower milk deliveries constraining production, cheese output fell approximately 2.3%, equivalent to 3,200 tonnes, while imports and exports moved in opposite directions. Imports rose by around 3.6%, adding 4,300 tonnes, but the increase was insufficient to offset weaker domestic manufacture and stronger overseas shipments. Exports climbed 15.3%, approximately 8,000 tonnes, reaching a quarterly record. That combination reduced the quantity calculated as available for UK consumption even though the export performance of British cheese manufacturers was comparatively strong. The domestic and export markets can therefore move in different directions at the same time.

The increase in cheese exports included shipments to the Netherlands, France, Belgium and Germany, with further demand from destinations beyond Europe. Shipments to some markets further afield also increased, although transport conditions can affect individual routes. The changes show how domestic availability responds both to decisions about how much cheese factories make and to where that finished output is sold. An increase in exports can support processor sales while reducing the quantity remaining in the domestic supply calculation unless it is offset by additional production or imports.

Butter availability contracted more steeply because domestic manufacturing and imports both declined, unlike the combination of reduced cheese production and growing cheese imports. Domestic output was approximately 4.3% lower than a year earlier, a reduction of about 2,600 tonnes. Imports fell by 8.4%, or 1,400 tonnes, while exports increased by 7%, around 900 tonnes. Taken together, these movements accounted for the larger proportional contraction in butter availability. The data do not establish that all users experienced shortages, nor do they identify the precise balance between retail, foodservice and industrial demand.

The processing decision also depends on the return from cream: churning concentrates milk fat into butter while producing a separate buttermilk stream. Converting cream into butter concentrates milk fat and produces a separate buttermilk stream, requiring manufacturers to consider the market value of both products and alternative uses for their raw materials. AHDB reported unfavourable conditions for butter manufacture in the quarter. Processing decisions can therefore reinforce the effect of smaller milk deliveries, with factories adjusting their production mix within the limits of their equipment, contractual relationships and product specifications.

Underlying both manufacturing streams is the composition of incoming milk, since the amount of fat and protein delivered affects the quantity of finished product obtainable from the same number of litres. A change in raw milk composition may influence cheese yields and the allocation of cream, while different processing operations have specific requirements for concentration, separation and heat treatment. AHDB’s availability assessment does not isolate every factor behind the observed manufacturing reductions, so lower delivery volumes, changes in composition and commercial production decisions cannot be assigned precise individual shares of the decline.

These changes enter AHDB’s calculation through domestic production plus imports minus exports, which measures available supply rather than product stocks in warehouses or shops. This accounting identity gives a consistent framework for comparing periods, but it is not an audit of inventories at individual factories or retailers. It also does not measure consumer demand directly. The movement in available supply might eventually interact with pricing and procurement decisions, but the quarterly calculation alone cannot prove a specific retail price change. The distinction is important when interpreting the 7.6% and 3.3% contractions as indicators of the supply balance.

Production and trade elsewhere in Europe followed a different pattern, with earlier EU assessments reporting stronger milk deliveries and greater availability of some manufactured dairy products. Processors buying milk products internationally may consequently encounter different supply conditions from those facing the domestic UK market. The comparison does not remove the need to account for transport, product specifications and trade arrangements. Further data on deliveries, manufactured volumes and export demand will establish whether the second-quarter contraction continued into the second half of the year.

The conclusion is confined to butter and cheese because AHDB lacked the domestic production figures needed to calculate equivalent second-quarter availability for milk powders. The published results therefore support conclusions about butter and cheese, but not a blanket statement about all dairy categories. Milk deliveries, herd numbers, winter feed supplies and trade flows will remain important determinants of the supply balance, with the October data providing a defined historical baseline rather than a forecast of future shortages.