Livestock farmers in many areas of the country face massive cost increases after record July heat claimed most of the summer grass.

Dairy and sheep farmers appear to be worst hit, with many milk producers buffer-feeding next winter’s rations and sheep losing condition rapidly.

Unless the next few weeks brought enough rain to encourage grass growth, the situation would become acute, warned Jonathan Ovens, chairman of the Arla Foods Milk Partnership.

“About 50% of our members are feeding winter forage.

Unless the situation changes quickly, this could easily add 1p/litre to dairy farmers’ variable costs.”

On a 170-cow unit producing 1m litres a year, that meant an extra 10,000, or 80 a cow, in feed costs, Mr Ovens said.

“And cereals prices are already moving upwards which will push the price of concentrate feeds higher still.”

Wes Abbey, who milks 250 cows at Easingwold near York, said dairy farmers in the region were all buffer-feeding to some extent.

“Some are on full winter rations.

If it hasn’t already meant an enormous expense, it will lead to it this winter.”

Other farmers had grazed off what would have been second-cut silage.

“We’ve now lost our second-cut crop – normally 1000t – in its entirety.

In a normal year we could expect to have to pay 20,000 to replace that. But this year, with everybody seeking extra supplies, prices could rise 50% if not higher.

I think a 1p/litre cost increase would be the minimum,” said Mr Abbey.

There were rumours that some worst-hit farmers had been forced to sell cows, rather than face the massive bill for replacing winter forage, he added.

While some areas have benefited from isolated pockets of rainfall, the outlook among sheep farmers looks equally alarming.

Peter Morris, chief executive of the National Sheep Association, said:

“Some producers are selling lambs for slaughter before they are fit as they have no good grass to put them on, and this has contributed to the price fall.

“But more concerning is the condition of ewes going to the tup this autumn, if grass doesn’t recover.

That could seriously affect conception and lambing rates in 2007.”

Beef farmers are reported to be anxiously waiting for new-crop straw deliveries to feed stock out at pasture.

Peter King, the NFU’s chief livestock adviser, said the pressures of supplementary feeding in August would cause variable costs to jump 15-20% on some farms.

“Some producers are sending animals to store markets rather than face the feed costs of finishing them.

Farmers need to market stock very carefully to protect their market.”

News was expected this week on a derogation to allow grazing on set-aside before September, he added.

Trade at this year’s early breeding sheep sales has been lacklustre.

Auctioneers report that ewes’ condition reflects the dearth of grass, dampening trade further.

The NSA’s early ram sale at Builth Wells saw a top price of only 900gns, while average values at last week’s Thame and Bicester sheep fair fell 8 a head on the year.

ian.ashbridge@rbi.co.uk