Dairy Farmers of Britain (DFOB), owned by 1800 farmers who supplied about 10% of UK milk, was placed in receivership late last week, with commentators saying it was the result of poor business decisions.
Federated Farmers dairy section chairman Lachlan McKenzie said milk which would have gone to the co-operative would still find its way to the market via other processors.
"There will still be just as many cows milked tomorrow as before it went into receivership," he said when approached for comment.
Reuters reported that the UK dairy industry suffered from growing competition from European imports and increasing buying power from supermarkets.
Dairy companies countered that by vertical integration, adding value by buying brands and companies through which they could market dairy products directly to consumers, a move it was claimed DFOB had managed poorly by paying too much for assets.
Mr McKenzie said although DFOB was of a different structure from that seen in New Zealand, its collapse sent relevant messages concerning government meddling and the importance of a strong farmer-owned co-operative.
He said the UK Government's interfering in DFOB had reduced the power of its farmer-owners, and the company also had been feeling pressure from the powerful UK supermarkets, which were driving prices down.
Reuters reported there was concern the UK dairy industry was shrinking and that supply of dairy products could be dominated by importers.
Five years ago raw milk production was 14.32 billion litres but fell to 13.42 billion litres in 2007 and 13.13 billion litres a year later.
Dairy analyst Tony Evans, of farm consultants The Andersons Centre, was quoted as saying other than liquid milk and high-value products such as Stilton cheese, price pressure from retailers would see the UK reliant on imported bulk standard cheese, butter and milk powder.
"The logic is it has to migrate all the time to the lowest cost areas if the retailer continues to just pound away at the price."
