GB milk supply falls as low prices force farmers to cut back

Milk production on farms is showing signs of a significant slowdown at a time of year when it should be increasing, as low farmgate prices continue to squeeze margins.

Dairy producers have been limiting output, with daily milk deliveries falling below last year’s levels during September and October.

GB daily milk deliveries were down 2.3% on the same week last year in early October to average 32.22m litres a day.

See also: Losses build for dairy producers after further price cuts

Organic milk deliveries were also notably back on last year’s levels, down 12.4% on the same week last year.

Susie Stannard, AHDB lead dairy analyst told Farmers Weekly that the longer term effects from low farmgate prices were putting pressure on margins with the milk to feed price ratio having gone firmly into the contraction zone, with feed prices still high.

Ms Stannard said there had also been a small short-term effect from the closure of milk haulier Lloyd Fraser.

“We regularly see a second peak in production from autumn calving, and especially as grass growth still remains well above the seasonal average.

“However, we are annualising against a very strong autumn last year, when the grass grew strongly after the drought paired with quickly rising prices.

“This means we would be expecting to see some year-on-year declines,” she added

Grass growth

Dairy farms averaged 38.6kg/ha of dry matter daily for the week beginning 9 October, according to figures from GrasscheckGB.

This is an increase of 34% compared with the same week last year.

The grass monitoring service said grass growth has remained above average and provided a welcome boost to winter forage supplies.

Markets

The UK average milk price for August was 36.22p/litre, according to Defra. Meanwhile, spot prices have been reported at about 37p/litre.