Dairy producers’ margins fall

Dairy producers’ margins over purchased feed fell by £34,000 in the 12 months to June, according to latest figures from The Dairy Group.

With milk prices rising by 1p/litre over this period, and rolling feed costs increasing by 1.6p/litre, the MOPF per cow fell by £151, to £1,530.

Milk yields fell by 6.5%, to 7,575 litres, with milk from forage dropping by 22%, to 1,695 litres, said director Ian Powell. “The purchased feed price increased by 13%, to £248/t, with the feed rate increasing from 0.32kg/litre to 0.34kg/litre. There will need to be a sustained improvement in the milk price: feed cost ratio to restore the lost margin.”

Global dairy commodity prices increased by 2.4% at the latest Fonterra auction, to a weighted average of US $4,980/t. But UK commodity markets remained very quiet during September, influenced as much by currency movements as any fundamental shifts in supply or demand, said a DairyCo report. “The improvement in milk deliveries has shifted market sentiment, with buyers and sellers adopting a ‘wait-and-see’ attitude to committing to prices.”


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