The potential cost of a drought

Published 18 July 18

Latest milk production statistics show volumes continuing to drop in line with expectation, despite the exceptionally hot and dry weather conditions. Combined, May and June were the hottest and 5th driest on record. It is this combination of high temperatures and lack of rain that has led to soil moisture conditions at the end of June being the driest on record, for the UK as a whole.

A similar situation was last seen in the UK back in 1995, although in that year it was August that was particularly dry and hot. Promar Milkminder data can shed some light on how the industry coped back then.

As you would expect, the proportion of milk achieved from forage dropped significantly in the summer of 1995. Despite rain returning in September, the forage performance did not recover.

Milk from forage 1995 

Overall milk yields fell 2.1% in August compared with July. At the time, the expected drop between July and August was around 0.7% (based on the 5-year average). The additional drop in milk yields wiped around 15m litres of milk off GB milk supplies in August 1995.

 Yield per cow 1995

Yields did appear to recover in September 1995, with performance back up above the 5 year average. The final chart gives some indication how this was achieved, with a clear step up in concentrate usage through July, August and September compared with the normal profile.

 Conc usage 1995

The additional concentrate usage was 15% in August and 12% in September. To put this in context, if we applied the same increase in concentrate usage at the current concentrate prices (£225/tonne) the additional cost to the GB dairy industry would equate to £265k per day, or around 0.8ppl for the milk produced over those two months.

The historic analysis is based on overall country averages, and does not take into consideration regional or localised issues. The impact on individual farms will be highly variable. We should also bear in mind that 1995 was 23 years ago and the GB dairy industry has moved on significantly since that date. Average milk yields have risen more than 30%, driven by increased concentrate usage (up more than 40%), and with less milk coming from forage. As a result, the impact on the industry this year may be markedly different to what we encountered back in 1995.