SHETLAND Farm Dairies has apologised for failing to meet demand this summer, with retirement and poor availability of fresh grass for cows to graze on two reasons why stocks are currently low.
The co-operative said it also did not take the step of using milk from Orkney - as it had previously done so - to overcome shortages after it received negative feedback.
The dairy uses milk from four farms across Shetland, but south mainland farmer Derek Flaws has retired.
"This, along with the impact that is felt at this time of year due to the changing weather conditions and fresh grass availability, has caused a shortage," the company's Fiona Nicholson said on behalf of directors.
"The dairy farms in Shetland are keen to have their herds graze out in the Shetland summer, unlike many farms throughout the UK which have housed cattle all year around.
"The down side to this is the reduced ability to control how much the cattle are eating and so how much milk they can produce."
The company, which makes Shetland milk, cream, butter and buttermilk, expects production to start meeting demand soon.
Managing director Gerry Byers warned in 2016 that the local dairy industry might be gone in five years time if sales didn't pick up, with the downturn due to oil workers leaving Shetland and supermarkets importing more mass-produced milk.
This prompted a public campaign to encourage more people to buy locally.