Sour milk

For many UK dairy farmers, the numbers just don’t add up. High prices of essentials including fertiliser, fuel and feed have prompted production costs to shoot up in recent months. At the same time, a global oversupply of milk has resulted in some dairy processing companies slashing the amount they pay to farmers. Some have been forced to sell milk for as little as 29p per litre despite it costing around 40p to produce. 

It’s just the latest pricing crisis to hit a long-suffering industry. Over the last decade, in a bid to boost productivity and remain profitable amid such uncertainty, many farmers have been forced to “scale up”, including increasing herd sizes or switching to more intensive production systems, known as “year round housed” farms where the animals are kept permanently indoors. 

Such units have supplied major processing players that dominate in the UK: companies like Arla, Müller and Saputo. These outfits in turn sell milk, cheese and other dairy products to supermarkets, with some raking in huge profits while many farmers struggled to make ends meet.

“We have a handful of powerful retailers at the top [and] a number of processors and distributors in the middle exploiting the hundreds of thousands of farmers stuck at the bottom,” said Liberal Democrat MP Danny Chambers. “After the more powerful players take their cut, the farmers get whatever is left.”

Factory production

The result has been a significant rise in factory-style dairy farms the length and breadth of Britain – which have prompted major concerns over the potential economic impacts on smaller farms, as well as animal welfare and pollution. But a loophole in the law means the government doesn’t monitor how many of these there actually are. So we’ve counted and mapped them.

We found that the number has more than doubled in the past 10 years, from around 70 to 180. Within that, there has also been a doubling in the number of so-called “megadairies”, which house more than 700 cattle. We’ve counted more than 40 of these – the largest of which contain 2,600 cows. 

Farmers themselves are divided over the rise of intensive farms. Some who are adopting these systems “feel like they have got to do it,” we were told by one farmer. Others maintain that “rear round housed” systems allow greater productivity and enable the cows’ health to be more closely monitored. They argue animal welfare and environmental standards aren’t compromised in well-run units. 

Yet campaigners express alarm at the increase in what they describe as “battery cow” units. As one organic farmer told us: “There’s not a close enough connection between consumers [and the way] food is produced on farms.”

The UK's dairy sector operates on notoriously slim margins. And right now it is facing what one analyst described as the “biggest and quickest price drop on record”.

“The only way to make more money is to produce more milk,” one dairy farmer told us. He used to run an intensive unit where he milked cows housed indoors three times a day. But he bucked the trend and switched to outdoor grazing, in part because of the stress involved in intensive farming. He has now diversified his business, including by delivering milk directly, to remain viable.  

Feedlots

The move towards factory-style dairy production reflects a wider pattern across the UK’s livestock sector over the past decade. In 2017, an investigation revealed the spread of hundreds of poultry and pig “megafarms” across the country. A year later, a further probe revealed that US-style intensive beef “feedlots” had arrived on UK soil – and that the government wasn’t monitoring them either. 

“When cost margins are made so tight by retailers, farmers feel they have no choice but to find every way they can to make the numbers add up, or face losing their business entirely,” said Chambers.

“Nobody is getting a fair deal if people can’t afford to buy healthy food and producers can’t make a profit producing it in a way that maintains high welfare and environmental standards.”  

Chambers is one of a group of MPs currently calling for further legislation to ensure fairer treatment and prices for farmers within supply chains.  

Many of the largest megadairies supply products to processors such as Arla, which in turn has supplied branded milk to Asda and also makes Anchor Butter. Saputo, meanwhile, makes Cathedral City Cheddar, which is sold by most major supermarkets. Tesco, Morrisons and Aldi are amongst retailers that have sourced milk from intensive dairy farms.

Slim profits

Low-priced fresh milk has long been used by supermarkets to attract customers. And 2022 research found that a typical 480g supermarket pack of mild cheddar, which sells for around £2.50, will leave the dairy farm that produced it with less than a penny in profit. 

This situation is “unacceptable yet normal”, says Tim Lang, professor of food policy at City University and one of the country’s leading supply chain experts. 

“The consuming public would be genuinely shocked to learn the returns on dairy work are so low ... Artisanal producers have tried to build alternative models: shorter supply chains, niche markets, high quality, high welfare. But their products are inevitably more costly.” 

Lang said the UK dairy sector was under constant pressure to increase capacity and the current system has locked farmers into an “environmentally and strategically undesirable drive for scale”. 

Judith Bryans of Dairy UK, the industry association that represents processors like Arla, Müller and Saputo, told us: “Currently there is more milk being produced than the market needs, both in the UK and globally, while wider economic pressures are also impacting the industry. When there is over-supply, prices tend to fall until the market balances again.” 

She added that there are rules in place to ensure a fair and transparent milk trade but that the sector needs to stay financially viable to ensure investments in environmental improvements, processing innovations and the rising costs of doing business.

Andrew Opie, Director of Food & Sustainability at the British Retail Consortium, which represents supermarkets, said: “Supermarkets are committed to supporting British dairy farmers and have invested heavily in UK agriculture through partnerships, dedicated programmes and additional support. Supply chains are also strictly regulated by the Groceries Code Adjudicator to ensure suppliers are treated fairly.”

Tesco said it uses transparent pricing structures to buy its milk, which ensure farmers get consistent and fair prices. 

The trend toward intensive farming has also raised concerns about the welfare of animals housed permanently indoors. Patrick Holden, head of the Sustainable Food Trust and an organic dairy farmer, described our latest findings as a "scandal". 

“The euphemism of ‘fully housed’ should be replaced by ‘battery dairy cows,’” he said. “We managed to ban battery eggs, why not battery cows? It is shameful that we subject cows […] to these conditions of confinement.” 

However, the dairy farmer who previously ran an intensive unit said such systems improve farms’ production and are “as good if not better” in welfare terms than grazing systems.   

Welfare standards

And Professor Jude Capper, a livestock expert at Harper Adams University, said there is no inherently good or bad system, and that animal welfare depends on good management. “Although the pastoral image of a cattle grazing a sunny, lush pasture is aesthetically appealing, as consumers, we often forget that there are just as many days of driving rain, high winds, low temperatures or drought in the UK that can have adverse effects on health and welfare,” she said.

Dairy UK's Judith Bryans maintained that the UK has some of the world’s highest animal welfare, food quality and environmental standards. Andrew Opie, of the BRC, added: “Retailers take their responsibilities to animal welfare very seriously and they ensure it is a key part of the production standards for all the products they sell."

Tesco said all its dairy meets welfare standards that exceed government requirements.

Unlike intensive poultry and pig farms, which are tightly regulated, large dairy units in the UK aren’t required to hold an environmental permit.

The Department for Food, Environment and Rural affairs (Defra) told us that it has a database of all livestock farms in England and keeps a record of all their cattle through its “robust” tracing system. But when it comes to the types of production being used on farms, its monitoring comes up short.

So using public and industry records, satellite images and drone footage, we identified nearly 180 factory units across the UK. Perhaps unsurprisingly, major dairy producing regions Devon, Cornwall, Dorset and Cheshire were among hotspots for factory-style production. 

The largest were in Pembrokeshire, Lancashire and Cheshire. The average UK dairy herd is only 175 cows; these all held more than 2,000. 

Late last year, the government signalled it would consult on plans to extend its environmental permitting scheme to include dairy farms, as well as “intensive beef” units. This was partly in response to concerns that the cattle sector was responsible for significant numbers of pollution incidents. Farms with a permit are subject to more frequent inspections and must take action to mitigate environmental impacts.          

Defra said previously that cattle farms are significant polluters of both water and air (via ammonia emissions). And it said it would “explore fair and proportionate approaches that seek to maximise environmental benefits and minimise costs and administrative burden for farmers”.

Widespread pollution

Data released under freedom of information laws shows that between January 2024 and February 2025, Environment Agency officials recorded more than 450 pollution incidents connected to dairy and beef farms in England, compared with 123 incidents for poultry and pig farms. 

And in the decade prior, cattle farming was linked to four times more pollution incidents than poultry farms, and around six times more than pig farms. Cattle farms in Wales and Northern Ireland were also the bigger offenders (no comparable data exists for Scotland).        

Although many incidents would have occurred on conventional, outdoor cattle farms, our analysis shows that nearly one in five of the largest intensive units had been linked to pollution in recent years. 

Researchers mapped all serious farming pollution incidents recorded across England between 2014 and 2023 and found that amongst areas most affected were the West Country counties of Devon, Cornwall and Dorset, all regions where significant numbers of intensive cattle farms have been found to be operating. Critics say mandatory permits for cattle farms would equip officials with more accurate information with which to block new intensive farms or expansion of existing ones.

Farming chiefs have expressed concerns over the government's potential permit scheme extension, saying the additional red tape and costs could be detrimental. 

And Hayley Campbell-Gibbons , Chief Executive of the Royal Association of British Dairy Farmers (RABDF), told us the group was "keen to explore an industry led approach to reducing pollution incidents, alongside understanding how a permitting approach could feasibly operate and be properly resourced in a sector as large and diverse as dairy."

"Nobody would disagree that one pollution incident from farming is one too many; it's about finding the solution that will have the best environmental outcome."

Treadmill

Some farmers themselves have told us they believe the plans could prove counterproductive, should they be phased in. They said smaller farms might decide to close in response, paving the way for further consolidation, and even intensification.

Such fears follow the publication of data showing that 20% of British dairy producers have quit since the Covid pandemic. The figures, released by analysts from the Agricultural and Horticultural Development Body (AHDB), estimated that the number of farms had dropped from nearly 9,000 to about 7,000 over six years. Experts have warned that the current crisis could see another 700 more farmers pack up for good.  

Patrick Holden said that ultimately farmers weren’t to blame for the transformation of the UK’s dairy industry: “They are just part of this treadmill of intensification, [which] these days [is]  hard to get off because the ‘get big or get out’ trends have made small scale family dairy farms unviable”.

Investigation team: Abbie Parker, Verity Portas and Nicole Pihan

Photography: AGtivist