Output likely to slow as milk to feed price ratio falls

The AHDB Dairy milk-to-feed price ratio for November 2019 averaged 1.25, down 0.04 on the previous month.

The ratio is a measure of how much feed can be bought with one litre of milk, and the latest drop is a combination of lower milk prices and some feed costs trending higher.

An estimate from the AHDB puts the measure down further for December at 1.18.

Kite Consulting has just produced its February ratio, at about 1.2, said the firm’s Edward Lott.

See also: Dairy budgets show no profit before BPS next milk year

While the ratio would not be something for an individual farmer to base decisions upon, it is a good indicator for the industry of sentiment towards milk production levels, he said.

“The lower the ratio, the lower the production incentive.

“If it gets down to between 1.1 and 1.05, then you’re looking at severe negative milk production territory of a 5-10% drop in milk output.”

The reducing ratio is already having an effect on national production, he said.

The average butterfat content of milk in December 2019 was 4.25%, a slight drop from November’s 4.3%, but remaining at elevated levels, said AHDB Dairy.

This year’s is the highest December figure for 10 years and well above the three-year average of 4.18%.

Defra’s average UK farmgate milk price for December 2019 was 29.32p/litre, down 0.53p/litre on the November average.

Averaging 3.41% in December, protein was also at a 10-year high for the month.


Support for farmers facing 2021 challenges

Register now

Online grain trading made easy with Farmers Weekly Graindex

It takes just a couple of minutes to create a listing on Farmers Weekly Graindex and you’ll get a range of prices to compare from active buyers who want your grain.
Visit Farmers Weekly Graindex