While the Government has not undertaken a specific assessment of how the costs of dairy supply chain emissions reductions are distributed, we are committed to working with the whole food supply chain to reduce agricultural emissions to strengthen food security whilst supporting farm profitability. As part of this, we are supporting businesses to invest in their supply chains to improve resilience and sustainability, with financial benefits flowing to farmers.

The Animal and Plant Agency (APHA), as the national regulator for farmed animal welfare in Great Britain, undertakes proactive and reactive inspections on farms to monitor compliance with legislation. Official veterinarians of the Food Standards Agency (FSA) are present in all approved slaughterhouses to monitor and enforce welfare requirements at slaughter. The APHA and FSA investigate all potential animal welfare non-compliances that come to their attention and appropriate action is taken against anyone who breaks the law.

The Nursery Milk Scheme is a statutory scheme which allows early years childcare settings to reclaim the cost of providing one-third of a pint of milk per day to children under the age of five who attend a setting for two or more hours per day. It is led by DHSC rather than Defra. DHSC have not asked for any assessment of the scheme’s impact on demand, farm incomes or food production, and accordingly no such assessment has been carried out.

The Government continues to work closely with all livestock sectors as they face higher input costs particularly for fuel, energy, and fertiliser.

At the March 2026 meeting of the UK Agriculture Market Monitoring Group (UKAMMG), Defra and the Devolved Governments decided to closely monitor the price and availability of these key inputs in light of the ongoing conflict in the Middle East.

The UKAMMG monitors UK agricultural markets including price, supply, inputs, trade, and recent developments including international conflicts and extended unfavourable weather. The Group meets monthly, enabling it to provide forewarning of any atypical market movements.

I refer the hon. Member to the reply previously given to the hon. Member for Wrexham, Andrew Ranger, on 23 February, PQ UIN 112856.

The Defra-funded Food, Farming & Natural Environment Climate Service led out of the Met Office has developed evidence on adaptation options which improve resilience of the agri-food sector, including cost and ease of implementation. These adaptation options include those which could be implemented in response to increasing heat risk to UK dairy farms such as using deep rooting and heat tolerant forage varieties.

The Government needs long-term, nature-based solutions to manage the risks of extreme wet and dry weather. To support rural communities and farmers, the Government is funding actions to improve the environment, mitigate flood risk, and boost resilience, through Environmental Land Management schemes.

Defra holds no data on potential impact of increasing heat risk to UK dairy farms on grazing land and silage production to feed livestock. However, Defra continues to work closely with the sector to monitor the production of grass and availability of silage as a feedstock.

The UK Government must prepare a UK-wide Climate Change Risk Assessment (CCRA) every five years under the Climate Change Act 2008.

The third CCRA assessed the risks to and opportunities for agricultural productivity from extreme events and changing climatic conditions such as increased temperatures and heat. The next assessment, CCRA4, is due to be published in 2027.

The Defra-funded Food, Farming & Natural Environment Climate Service led out of the Met Office has developed evidence on adaptation options which improve resilience of the agri-food sector, including cost and ease of implementation. These adaptation options include those which could be implemented in response to increasing heat risk to UK dairy farms such as using deep rooting and heat tolerant forage varieties.

The Government needs long-term, nature-based solutions to manage the risks of extreme wet and dry weather. To support rural communities and farmers, the Government is funding actions to improve the environment, mitigate flood risk, and boost resilience, through Environmental Land Management schemes.

Defra holds no data on potential impact of increasing heat risk to UK dairy farms on grazing land and silage production to feed livestock. However, Defra continues to work closely with the sector to monitor the production of grass and availability of silage as a feedstock.

The UK Government must prepare a UK-wide Climate Change Risk Assessment (CCRA) every five years under the Climate Change Act 2008.

The third CCRA assessed the risks to and opportunities for agricultural productivity from extreme events and changing climatic conditions such as increased temperatures and heat. The next assessment, CCRA4, is due to be published in 2027.

The Government recognises the importance of transparency and fairness in the dairy supply chain, so that farmers and other suppliers are able to make informed decisions and receive a fair return for their produce.

The Fair Dealing Obligations (Milk) Regulations 2024, which has applied to all milk contracts since July 2025, established new contractual requirements between dairy farmers and milk purchasers. The Regulations improve fairness and transparency, requiring dairy contracts to include clear terms on pricing, termination and prohibiting unilateral changes.

The Agricultural Supply Chain Adjudicator (ASCA) has been appointed to oversee and enforce these regulations, providing a route for complaints where parties believe the rules have not been followed.

The Government paid more than £2.6 billion to British farmers, including those in the dairy sector in 2024-25, the most funding in a single financial year since we left the EU. This included funding toward Environmental Land Management schemes, improving animal health and welfare on farm and grants to drive innovation in agriculture and food production across England.

The UK dairy industry is a resilient and dynamic sector which operates in an open market where the value of dairy commodities, including farmgate milk prices, is established by those in supply chains including farmers, processors, wholesalers, retailers, and consumers. Price fluctuations are a normal part of how the dairy market operates as it seeks to balance supply with demand.

The Government paid more than £2.6 billion to British farmers in 2024-25, the most funding in a single financial year since we left the EU. This included funding toward Environmental Land Management schemes, improving animal health and welfare on farm and grants to drive innovation in agriculture and food production across England.

I recognise the current sharp falls in milk prices is extremely challenging for dairy farmers.

The Fair Dealing Obligations (Milk) Regulations 2024 now apply to all contracts, ensuring greater transparency and the resilient dairy supply chain we need for our national food security.

The average cost of production for milk is shown below. Data is from the Farm Business Survey which covers farm businesses in England with a Standard Output of more than £21,000. Whilst it captures the majority of agricultural activity, it excludes smaller businesses (which account for 2% of output).

Production costs include all financial aspects of dairy enterprises such as unpaid labour, herd depreciation and an estimated rental equivalent for owned land. An allowance is also made for non-milk revenue (mostly the sale of dairy calves), which is applied as a reduction to cost. This reflects the value of by-products from milk production. The production costs therefore represent the price that would have to be paid on all milk produced for dairy enterprises to break even. The data includes organic production which is likely to incur higher production costs.

Average cost of milk production (pence per litre) 2020/21 to 2024/25

Source: Farm Accounts in England

Defra officials regularly engage with stakeholders from across the UK dairy industry on a wide range of issues including farmgate milk prices. Engagement is undertaken in various forms including through ad hoc and regular meetings with industry bodies and individual dairy businesses and milk producers, farm visits and attendance at industry events.

.

This is a devolved matter, and this response applies to England only.

The School Milk Subsidy Scheme is available in participating schools and supports the provision of milk, certain milk products and yoghurts.

The administration of the scheme is renewed regularly, and funding decisions are made on a single or multi-year basis, influenced by the timing and the duration of departmental spending reviews.

The volume of milk consumed under the scheme annually accounts for less than 1% of total UK milk production. It therefore has limited impact on the financial sustainability of those in the dairy supply chain who participate in the scheme.

The UK dairy sector is highly resilient and adaptable and continues to supply healthy and affordable products, both capitalising on the opportunities and rising to the challenges it has faced in recent years.

Following a recent period of enhanced profitability for the UK sector, supply of dairy is currently exceeding demand on both our domestic and wider global markets. This is resulting in reductions to UK farmgate milk prices.

Ensuring fairness in supply chains is key for UK dairy farmers and supporting the sustainability of the sector. The Fair Dealing Obligations (Milk) Regulations 2024, which fully came into force on 9 July 2025, improve fairness and transparency, requiring dairy contracts to include clear terms on pricing, termination, and prohibiting unilateral changes. However, these regulations are not intended to set prices.