GB milk production set for 29-year high

British milk production is forecast to hit a 29-year high in the coming season, which starts on 1 April.  

Overall production for Great Britain in 2019-20 is forecast by AHDB Dairy to be 12,590m litres – up 0.7% on the 2018/-9 season.

If this proves to be the case, the figure will be the highest since 1990-91.

See also: Eight rises in a row for global dairy auction price

AHDB analysts based the estimate on recent milk yields, which had risen after drought-hit farms were forced to switch from forage to concentrate feeding.

The extra energy and protein pushed up yields between November and February to record highs, 2.4% above the same period a year earlier.

Confidence that milk yields will remain high has been bolstered further by a relatively mild winter.

“The warmer weather has diminished earlier concerns over feed availability and cows are reported to be in good condition,” according to an AHDB report.

“Spring yields are strongly influenced by the weather, so providing conditions remain normal, yields are likely to remain high,” the report added.

The increased yield is more than offsetting the continuing decline in herd numbers and, overall, the stage is set for volumes to reach a record high.

Expert market insight from Peter Meehan, INTL FCStone senior commodity analyst 

European dairy markets remained volatile over the past week, with butter and skim milk powder (SMP) quotations both seeing declines.

The European butter quotation posted its eighth consecutive drop last week, now down 9% since the end of January, while the SMP quotation saw back-to-back weeks of declines.

Dairy futures markets were somewhat mixed over the same period.

EEX butter futures’ March 2019 to October 2019 contracts gained 3% last week, while EEX SMP’s March 2019 to October 2019 run fell by 2%.

European SMP’s drop coincides with New Zealand SMP also softening in recent weeks.

While last week’s GDT auction recorded its eighth increase in a row, SMP saw its second decline in as many events.

The apparent weakness in global SMP prices comes about despite record exports from the EU in January (+53%) suggesting there is still good global demand for SMP.

Meanwhile, milk collection numbers released last week showed record milk production for the UK (+3.6%) in February, while Dutch collections continue to struggle (-1.8%).

NZ production also fell back in line with last year as a result of the hot, dry weather the country has experienced since late January. US milk production also saw its 24th straight month of gains (+0.3%).

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