Yew Tree Dairy producers losing money due to poor milk price
© Tim Scrivener Farmers supplying milk to Yew Tree Dairy in Lancashire have spoken out in frustration after being paid well below the market rate, with many receiving about 35p/litre.
This is roughly 7p/litre less than the price paid to producers supplying major milk processor Muller, which acquired Yew Tree Dairy last year.
Yew Tree Dairy producers told Farmers Weekly its current milk price had left them being paid below the cost of production and some were “losing thousands” each month.
See also: Muller launches Fast Track producer group to track emissions
Consultants have indicated average costs on-farm for the 2024-25 milk year to be in the region of 40-46p/litre, although exact figures can vary significantly between producers.
Dairy producers supplying Yew Tree Dairy say they have been stung by a combination of sustained low milk prices and punitive haulage fees of up to 5p/litre.
One supplier told Farmers Weekly they had heard of Scottish producers being paid 32-36p/litre after haulage deductions.
It is understood that a number of producers have either served or are considering serving notice to Yew Tree Dairy as a result of the unsustainably low milk prices.
A producer in the north of England said: “The Yew Tree price has been behind the market for a very long time, but since Muller has taken over, it’s been even worse.
“Month upon month we have been hammered.
“It’s hard enough losing £6,000 for one month, but when it’s been six months, that takes quite a significant toll on your business.”
Muller response
A spokesperson for Muller Milk & Ingredients said: “Milk from Yew Tree Dairy supplying farmers is destined for the ingredients market and therefore subject to global market returns.
“As with all aspects of the Yew Tree Dairy acquisition, we are currently undergoing a thorough review of a wide range of processes and procedures.”
The amount paid to farmers supplying Yew Tree Dairy has reportedly dropped since the takeover by Muller, despite the wider industry increasing milk prices last autumn and generally holding so far in 2025.
NFU Scotland Milk Committee chairman Bruce Mackie said: “Yew Tree Dairy plays an important role in creating market stability and giving new entrants a start, but any concerns around milk price discrepancy should be taken seriously.
“The union strongly urges Muller to pay a price that is sustainable for their hard-working producers.
“It encourages and supports members highlighting unfair practice in the supply chain.”
Yew Tree’s changing pricing structure
Yew Tree Dairy calculates the price paid to farmers on ingredients contracts based on three components: skimmed milk powder and cream, whole milk powder and cream, and brokered milk.
Traditionally, each of the three components accounted for about one-third of the overall milk volume and price. However, this has shifted in recent months.
Some farmers are now being paid for almost 90% of milk volume as skimmed milk powder and cream, roughly 10% of volume as brokered milk, and no volume at all as whole milk powder and cream.
One supplier said: “As time’s gone on, we’ve had a decrease in payment, which is apparently due to lack of market demand for skimmed milk powder and cream.
“Brokered milk currently has a higher value and only a small percentage is being allocated to that.”
The farmer added that, if the old system of one-third each was still being used, they would have been 3.5p/litre better off.
“We really hoped that it would get better with Muller.
“We went into it, we embraced it and were keen to crack on with it.
“We thought it was going to be a really positive move, but we are actually just really disappointed.”