Agribusiness News October 2024 – Milk

Milk production data

The latest GB monthly milk production data from AHDB is estimated at 991mlitres for August, which is 31 mlitres less than the previous month and 5 mlitres less than August 2023.  Daily deliveries were 31.78mlitres for the w/e 17^th September, which is just 200,000 litres less than the same week last year.  The UK milk volume for August is estimated by Defra at 1,189mlitres, which is 56mlitres less than July.  With reports of grass growth lower than this time last year, poorer silage quality and cows not milking as well as expected, little growth in milk volume is expected for the remainder of 2024, despite milk prices continuing to rise.

Farm-gate prices

Milk prices are still rising due to low seasonal production and strong demand with low product availability, especially of butter and cream.

The milk prices from the main Scottish milk buyers available at the time of writing are shown below:

Dairy commodities & market indicators

The wholesale markets for dairy commodities continue to rocket!  September’s bulk cream and butter price were up 16% and 10% respectively on the previous month, with some butter sales hitting an all-time high of £7,000/t. Strong demand and tight supplies both in the UK and in the EU are supporting prices.  Many processors are choosing to sell cream as opposed to incurring the cost of processing it into butter.  Even SMP and cheese are seeing higher prices now compared to in recent months. Again, reduced availability is supporting prices and as traders start to look for increased cover for the Christmas period, if milk supplies fail to rebound significantly, prices will climb higher and that should be further be reflected in improvements to the farm-gate milk price.

© AHDB [2024].  All rights reserved.

Given the record prices seen in the fats market, AMPE jumped 4.47ppl and the Milk Market Value indicator increased by a massive 3.98ppl to 45.28ppl for September. Globally, demand for milk products is not as fierce, going by the recent GDT auction (17^th September), where the average price index rose just 0.8%, with butter down 1.7% and cheddar up just 2.9%. Chinese demand is back, with net imports likely to be around 12% less than last year. Their domestic milk production has increased from 30.39mt in 2017 to almost 42mt in 2023. However, birth rates are falling, and a stagnant economy and aging population have reduced demand for butter, cream and cheese.

Feeding to maximise your milk price

With feed prices easing back and milk prices continuing to lift, it may be tempting to look at increasing feeding rates of concentrates to stimulate milk output. Remember that increasing milk output may not be favourable for milk fat or protein percentage, although overall solids production will likely increase with higher feed rates. Depending on your milk contract, you may be rewarded more for fat or protein, so it is worth thinking about what you can do nutritionally to influence the milk component that gives you the best return. It is very difficult to feed for an improvement in both fat and protein, without using both protected fat and amino acid supplements.

Fibre drives butterfat, so if the forage portion of the diet drops and starch levels increase (with higher cereal inclusion), butterfat will likely take a hit and milk protein percentage may increase, as energy and starch intake drives milk protein content. However, feeding concentrates that are high in digestible fibre, such as sugar beet pulp, soya hulls or wheat feed will be more favourable for butterfat production, especially if they replace some cereals in the diet. If they replace silage, the response in butterfat will depend on the quality of that silage being replaced. It is best to seek nutritional advice if you are looking to improve milk quality through changes in feeding.

Lorna MacPherson, lorna.macpherson@sac.co.uk