Agribusiness News November 2024 – Milk
1 November 2024Milk production data
AHDB’s latest GB monthly milk production data is estimated at 970m litres for September, which is down 20m litres from August and 9m litres more than in September 2023. Good grass growth and improved quality on the back of more favourable weather conditions have boosted milk output. Despite the recent uptick in milk volumes, GB production from April to September was back 0.6% (or 6,230 m litres) on the same period in 2023. The current production forecast for the 2024/25 milk year is 12.28b litres, just 0.3% less than the previous year. The Defra UK milk volume for September was 1,153m litres, down 3.4% on August but 1.4% above September 2023 volume.
Farm-gate prices
Despite milk volumes rising and commodity prices now on the turn, milk price rises for November are still being seen from the main Scottish milk buyers.
Dairy commodities & market indicators
The wholesale markets for dairy commodities have eased back from the all-time highs seen in the fats market last month. With milk production up in September and higher fat levels in the milk, along with a slight fall in demand, buyers are wary of purchasing too much stock in case prices fall further. However, butter and cream supplies are still tight, with less butter being produced, as processors favour selling cream rather than going to the expense of manufacturing butter. As cheese prices are slower to react to market forces than butter or cream, mild cheddar bucked the trend and rose on average by 4% in October. However, forward price futures contracts for cheddar and other cheeses are down for both Q1 and Q2 next year. The movements in prices are reflected in the market indicators, with AMPE back 1.66ppl and MCVE up 1.79ppl from September.
Positive outlook for dairy profits
The average milk income in 2023/24 was £2,910/cow, 19% less than the previous year according to the Old Mill and Farm Consultancy Group’s annual Cost of Production report. With the cost of production at £3,153/cow, the loss was £243/cow. Given the low milk prices in the 2023/24 year, profit/cow was only £152, compared to the five-year average of £478 and a huge drop compared to £914 in the previous year. Although feed and other variable costs are down from their highs in 2022, the fixed costs, power, labour, machinery and contracting costs are 10.7% higher than previously and are having a greater influence on the overall financial performance of dairy businesses. However, with milk prices continuing to rise, profit is expected to reach £590/cow for the 2024/25 year, with a milk income of £3,308/cow and a cost of production of £3,122/cow.
Are your calves happy?
Recent research by the University of Reading has looked at the positive effects of providing dairy calves with enrichment i.e. toys to interact with to enable them to show their natural behaviours, which in turn is thought to improve their mental wellbeing. Toys included plastic balls filled with hay; fixed broom brushes, a rope or plastic chain and a teat fixed to a board. Calves were disbudded at seven weeks of age and then assigned to either enriched on unenriched pens. Calves in the enriched pens showed higher levels of play activity and investigative behaviour. They also interacted more with other calves, showed less standing time (lay down more) and exhibited less undesirable behaviours such as cross-suckling. By improving the housing environment for calves by group rearing, ad-lib milk feeding and providing more enriched environments, the researchers believe that there will be long-term benefits by rearing more robust cows that are more adaptable to stressors and changing environments experienced by adult cows.
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