March milk output jumps

MARCH MILK production exceeded quota for only the second time in 12 months, latest provisional figures from the Rural Payments Agency suggest. Production in the new milk year is likely to rise, but not enough to undermine prices.

Dairy farmers delivered almost 1.2bn litres of milk to buyers during the month. Although this was almost 43m litres more than the same month last year, the brakes were very much on a year ago as producers tried to avoid going over quota.

Compared with March 2003, when farmers were pushing production with no fear of superlevy, output fell short by 19m litres, and consultants are not worried about a big spring flush.

But Chris Flint, of Kite Consulting, said he was advising his clients not to assume that quota was out of reach in the new milk year. “The milk price rise will be an incentive to produce for some, and the dairy premium has created a bit of a feel-good factor. However, clients are very keen to get the grass right to avoid dropping milk, and a lot of them are flattening out their production profiles to avoid seasonality penalties.”

Adjusting last month”s output figure for butterfat gives a net figure of 1.218bn litres, about 14m litres over the Charles Holt/farmers weekly quota profile.

Despite this, milk output for the whole 2004/05 milk year undershot quota by 201m butterfat-adjusted litres. Even allowing for permanent transfers between direct and wholesale pools, the shortfall is still likely to be about 175m litres.