New milk year sees output dropping

By Robert Harris

MILK output dipped sharply in April to a seven-year low as foot-and-mouth disease and three loss-making years on dairy farms took their toll.

Dairies took delivery of just 1.165 billion butterfat-adjusted litres of milk during the first month of the new milk year, according to provisional figures released by the Intervention Board this week.

Foot-and-mouth aside, there are fewer cows about, with MAFF December census figures showing a 4% shrinkage in the national herd as many producers, fed up with poor prices, left the industry.

But the disease has also had a significant effect, says Jonathan Smith of BK National Quota Exchange. He suspects it may take until next year before the industry recovers.

But MAFF figures show 433,000 cattle had been, or were about to be, slaughtered in the UK by the start of this week.

“That is 5% of total cattle numbers,” says independent consultant Mike Bessey.

“Assuming that dairy cow slaughter was pro rata in this total, this would indicate we have lost the equivalent of 550m litres.”

That equates to 27,000t of butter (20% of yearly UK output) and over 50,000t of skim milk powder (nearly two-thirds of output).

The shortfall is likely to last some time, he adds. Given restocking problems and the severe disruption of AI services during the outbreak, milk supplies may remain disrupted into 2003, says Mr Bessey.

Any milk shortage could provide added impetus to product price rises already in the pipeline, he says.

“Most dairy operators are anticipating very tight supply as the year goes on for home-produced supplies of manufactured products, including cheese.”

The butter market is wakening, and the EU is likely to be short of skim milk powder in the second half of the year, partly due to reduced output but also because world supplies are likely to be scarce, says Mr Bessey.

“Last years pattern of higher second half prices could be repeated. With greater competition for milk that could certainly trend towards higher prices for dairy farmers.”


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