IN Brief:
- UK dairy exports fell 11% to 613,500 tonnes in H1 2026, while export value declined 12% to £973m.
- Milk-powder exports rose 33.1% to a record 92,500 tonnes, while cheese volumes also reached an all-time high.
- The overall decline was driven largely by a 114,000-tonne fall in milk and cream exports and weaker shipments into the EU.
AHDB figures show UK dairy exports shifting towards manufactured products during the first half of 2026, with record volumes of cheese and milk powders failing to offset a sharp reduction in milk and cream shipments.
Total dairy export volume fell 11% year on year to 613,500 tonnes, while export value declined 12% to £973m. Within that weaker headline result, milk powders increased by 23,000 tonnes, or 33.1%, to a record 92,500 tonnes, while cheese also reached an all-time high.
The figures underline how aggregate dairy trade can move in the opposite direction to the manufacturing categories most relevant to processors. Falling shipments of bulk liquid product pulled total tonnage lower even as greater volumes of milk were exported after conversion into products requiring additional processing.
AHDB reports that milk and cream exports fell by 114,000 tonnes during the first half, while whey declined by a further 5,000 tonnes. Those reductions outweighed increased exports of powders, cheese, butter, and yoghurt.
Milk powders recorded the strongest percentage increase. The 92,500-tonne total was 33.1% above the corresponding period in 2025, with growth into European destinations including Germany, Italy, and the Netherlands alongside higher shipments to markets including Libya, Bangladesh, and Egypt.
AHDB’s headline figures put cheese exports at an all-time high of 116,300 tonnes. Growth was spread across European and non-European markets, including Belgium, France, the Netherlands, Libya, Bahrain, China, and Saudi Arabia.
The product mix matters to processors because powders and cheese use milk differently from liquid export routes. Converting raw milk into a storable commodity or matured product requires plant capacity, energy, labour, process control, packaging, and storage that are not reflected by looking at total milk availability alone.
Strong domestic milk supply has supported the shift. Earlier AHDB analysis linked higher powder exports with plentiful milk availability and competitive pricing, giving processors scope to direct more raw material into products capable of being stored and shipped over longer distances.
That flexibility becomes useful when individual export markets move in different directions. Milk powder can access buyers with different logistical and shelf-life requirements from fresh liquid dairy, while cheese reaches industrial food manufacturers, foodservice operators, and retailers across a broad range of specifications and price points.
The record volumes do not translate automatically into record value. Total dairy export receipts fell after two years of growth, and export value declined across every major category except powders and yoghurt.
Cheese remained the largest dairy export category by value at £461m, but its value fell 4.6% despite the higher physical volume. AHDB attributes part of the broader decline to lower commodity prices.
That creates an important distinction for manufacturers. A plant can process and ship more tonnes while generating less revenue per tonne, so record factory throughput or export volume does not necessarily indicate stronger margins.
The geographical pattern also leaves UK dairy exporters heavily exposed to Europe. The EU accounted for 86% of total export volume during the first half, but shipments into the bloc fell by 86,000 tonnes, or 14%.
Ireland recorded by far the largest individual reduction, although AHDB notes that the figures include milk crossing from Northern Ireland into the Republic for processing. That movement means changes in cross-border milk flows can materially alter the apparent export figures without representing an equivalent change in consumer demand.
Several other European destinations moved in the opposite direction. Shipments increased to the Netherlands, Germany, Denmark, Belgium, Spain, and France, while non-EU markets also produced a mixed picture across different dairy categories.
For milk powders, growth into destinations outside Europe provides some diversification from the regional market. The category includes tariff codes covering powdered, condensed, and evaporated milk, although AHDB notes that the group is dominated by milk powders.
Imports were comparatively stable. Total UK dairy import volume slipped only 0.15% to 636,000 tonnes, with lower milk and cream, whey, and butter imports largely balanced by increased yoghurt, cheese, and powder volumes.
The value of imports was approximately £1.8bn, down 0.9% from the first half of 2025. Cheese and curd remained the largest import category by value, reinforcing the extent to which the UK dairy market operates as both a substantial importer and exporter of processed products.
The manufacturing consequence is therefore more nuanced than the 11% fall in headline exports suggests. UK plants converted enough milk into cheese and powder to achieve record export volumes in those categories even while total dairy tonnage declined sharply.
That points towards processing capacity acting as an outlet for strong milk supply when liquid trade weakens. It also places greater weight on the competitiveness of British cheese and powder plants, because those facilities have to absorb raw material while competing against processors in other major dairy-producing markets.
AHDB identifies Asia and the Middle East as priority regions for British dairy export development, although trade conditions, logistics, geopolitical disruption, and global commodity pricing can quickly alter the economics of those routes.
The second-half question is therefore not simply whether record powder and cheese volumes can be repeated. Processors also have to protect value while deciding where abundant milk can be converted most profitably, particularly if liquid exports remain subdued.
For the first half of 2026, that balance shifted decisively towards manufactured dairy products. Cheese and powders provided stronger export outlets for UK milk, but the fall in overall value is a reminder that processing more product and earning more from it remain two different measures of industrial performance.
