Following AHBD’s recent dairy market forecast, and a number of price moves announced over the last week, it is clearer than ever that staying informed about market trends and understanding their impact on your milk pool is now essential practice for all UK dairy farmers.
The FDOM – Fair Dealings Obligations (Milk) – Regulations, which came into force fully in July 2025, aimed to make farm gate milk prices more transparent. While the regulations do not set milk prices, which remain market-led, the NFU succeeded in advocating for three key clauses focused around improving price transparency, reducing exploitive practices, and recognising the role of DPO (Dairy Producer Organisations).
Price transparency
Under FDOM regulations, all milk contracts must clearly explain the pricing factors milk buyers use to calculate milk prices. This transparency should enable farmers to understand how their milk price is determined and therefore which market indicators to use for forecasting.
As market conditions fluctuate, this clarity becomes even more important. If a contract lacks clear pricing mechanisms, farmers should discuss this with their milk buyer or milk pool representative to ensure they understand how their milk prices are set.
If the contract does not include the required information and this cannot be resolved with the buyer, the regulations provide a mechanism to ensure these issues can be resolved.
Additionally, any changes to the milk pricing mechanism used to generate farmgate prices require prior agreement from the farmer or, where relevant, their DPO.
We encourage all members to continue to raise questions and engage in constructive dialogue with their buyer on how their milk price is formulated. The office of the Agricultural Supply Chain Adjudicator remains there for any farmer concerned about a lack of transparency or engagement from their milk buyer.
The regulations also specifically empower DPOs to negotiate milk supply contracts collectively on behalf of supplying farmers. Although DPOs cannot influence global commodity prices, they can leverage their collective knowledge to negotiate fair and sustainable contract terms and, supply conditions for the milk pool they represent.
Price adjustments during periods of volatility
Market volatility truly tests the resilience of the dairy sector. Global commodity prices are beyond local control and often put pressure on supply chains, and present challenges for the farming sector.
However, the new fair dealing regulations do place farmers in a stronger position than during previous periods of market volatility. Dairy farmers can now challenge their milk processor to provide transparency when it comes to milk price adjustments.
Support and advice
The NFU will continue to monitor the impacts of the new regulations, working closely with producers, producer representatives and DPO’s to ensure all UK dairy producers receive fair and transparent contracts.
We will also continue to raise any issues or potential incidences of non-compliance with the new adjudicator, who is overseeing behaviour in the dairy supply chain.
However, it is important to note that the adjudicator can only officially investigate complaints made by farmers, so it is important that members also make use of the enforcement regime set out in their contracts.
Contact your local board representative or visit Dairy contracts – essential information for further advice and information.
