Archive: Lower milk prices unlikely to dampen UK milk supply in short-term

Published 22 October 14

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Milk prices have been cut considerably by some buyers in the past few months which has affected farmer margins. However, until this translates into a cut in cow numbers or yields, there is unlikely to be any sizeable reduction in milk deliveries. Current production conditions in the UK suggest that milk deliveries will continue to outperform year-earlier levels, at least for the remainder of 2014.

UK milk production is currently running at around 8% above last year’s levels, supported by favourable weather and forage conditions through the year. The dairy herd is in growth, with both England and Scotland reporting higher cow numbers compared to year earlier levels and, as yet, no observable increase in the cull rate has been seen. In addition, lower feed, fertiliser and fuel prices had contributed to a period of improved margins until recently.

With the lag in farmers’ ability to easily react to market signals and adjust production levels, milk production is likely to continue along its current path as we move into the winter months. How production progresses into next year’s spring flush will depend on whether prices are cut further, prompting a change in cow numbers and/or yields, what weather is experienced around the time of turnout and any change in feed prices.