Weather squeezes milk supplies

Global milk supplies could come under pressure following adverse weather in several key exporting countries.

Severe drought in the USA was affecting milk production and had slashed corn and soya bean production, said a report by DairyCo. “The feed-to-milk price ratio remains at a historical low as feed costs continue to rise. The US Department of Agriculture expects a rapid decline in the US dairy herd and has reduced milk production forecasts for 2012 and 2013 as a result.”

Poor weather also curbed Irish milk supplies, with June production 1.9% below 2011 levels. “Wet weather has impacted on grass growth and, according to a survey by Teagasc, 38% of dairy farmers are short of silage for this winter and nearly a third had sold livestock to alleviate fodder problems. This has the potential to impact not only 2012-13 milk production but 2013-14 as well.”

In New Zealand, production was likely to grow by 4-5% in 2012-13, although a forecast El Niño weather event could slow further growth. “Tightening milk supplies are helping to stabilise global wholesale prices, which could help UK wholesale prices moving in to the winter.”

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