Higher costs will push milk production down

Milk production will fall further through the rest of the summer with poor grass quality and high feed costs the main restricting factors.

GB daily deliveries to the end of June were down 1.7% on the three-year average and things are likely to have worsened since then, said Tony Evans, partner at consultant Andersons.

“It’s about managing costs and people will just cut back on everything. That will also have an impact on reinvestment.

“All cows that have calved in the past five months are likely to have been negatively affected by the conditions which will prevent them achieving their full potential for the rest of 2012,” he said.

Many autumn calvers would probably be dried off early because of the low response rate to additional feed in late lactation. The past three months may also have implications for fertility.

Using a £235/t feed price and an autumn 2012 milk price of 26p/litre, the milk-to-feed price ratio is 1:1 compared with 1:43 last autumn (one litre of milk buys 1.1 kg of feed compared with 1.43kg last year).

Evidence of the impact of the wet spring comes with the latest DEFRA figures showing that UK cattle feed production rose by 23% in May compared with the same month last year. On top of the huge increase in volumes being fed, compound feed prices have on average increased by 15-20% since May.

Raw material buyer Sue Mills of NWF Agriculture said that in May when demand for feed would have been expected to drop off, volumes had verged on those of winter months as rain kept cows indoors.

“If dairy farmers are looking to extend their forage there’s not really anything much out there. We’ve seen an increase in demand for blends too.”

Some producers were only just making first cut silage this week and had cows on full winter rations in the meantime, adding 50% to feed costs, said NWF’s George Franks, responsible for feed business in central England and Wales. The market was extremely volatile with raw material prices subject to daily changes.

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