Dairy producers faced significant turmoil in 2025/26, but a strong first half of the year meant they managed to secure record margins before markets turned south.
Kingshay’s annual Dairy Costings Focus Report demonstrates how the year evolved into two halves. High milk prices and record production led to plummeting milk prices in the latter half the year. Drought over the summer switched to flooding over the winter. Input costs soared amid political tensions in the Middle East – and looking ahead there appears to be more of the same.
“Producers have faced forage shortages amid the summer drought this year, and with forecasters predicting the strongest El Nino effect since the 19th century, there will likely be more extreme weather ahead,” says Richard Simpson, Development Director at Kingshay. “But farmers are nothing if not resilient, and many will have made the most of strong margins in 2025/26 to weather the downturn.”