Milk Matters
By Christine Pedersen Senior Dairy Business Consultant The Dairy Group
christine.pedersen@
thedairygroup.co.uk www.thedairygroup.co.uk
A more optimistic outlook for dairy in 2019? A recent AHDB report indicates an increase in global production in 2019 of just 0.3% due to low farmer margins in the Northern Hemisphere and drought conditions in the Southern Hemisphere. At the same time, global demand for dairy products is forecast to increase by 1.8%. UK production increased to 14.9 billion litres in the year to April
2019, but this growth is balanced by lower production in other parts of the world. Recent price moves have been downwards but we expect markets to firm as UK production declines towards the usual autumn trough. We are now seeing a more pronounced annual cycle to milk price, with lower prices in the Spring and higher prices in the Winter:
UK average milk price ppl
20.00 22.00 24.00 26.00 28.00 30.00 32.00 34.00
Apr-14 Aug-14 Dec-14 Apr-15 Aug-15 Dec-15 Apr-16 Aug-16 Dec-16 Apr-17 Aug-17 Dec-17 Apr-18 Aug-18 Dec-18 Apr-19 Month ppl
Rolling ppl 5year Source: The Dairy Group Ltd The UK rolling milk price has been very stable over the last 12
months at around 29.5p, whereas the 5-year rolling price has been slowly decreasing to just 27p in April 2019. This time period includes milk quotas ending in March 2015 and the dramatic impact on UK milk price. As we move further away from the price crash of June 2016, the 5-year rolling price will move towards the 29p level. The increase in worldwide demand for dairy products looks set
to outstrip any increase in supply which means producers should feel more optimistic about milk price as we move in to the autumn. Unfortunately, we cannot ignore the 31st
Forage outlook For some producers, 2019 is shaping up to be another challenging year for forage production. Many were able to take some early, super quality first cuts but lack of moisture slowed re-growth and excessive rainfall delayed second cut harvest. Whilst second cuts might have bulked up, quality could be compromised and the rationing of grass silages to different groups of livestock this winter will require a considered approach. Maize crops are also variable across the country with some crops challenged by insufficient moisture to germinate and others by too much rain and have been flooded. For producers likely to be short of forage, it is better to understand
the potential shortfall now so other options can be considered. Options include taking some cereal crops for whole crop, sourcing other standing or conserved forages, or forage alternatives. Harvest prices for feed wheat around £150/t puts the cost of wholecrop at £150/t DM when you take into account the loss of sales from the grain and straw and the costs of harvesting/ensiling. Anyone considering taking cereals for wholecrop should be aware that there is a fairly short window of opportunity to harvest at the ideal crop maturity stage. A crop that is destined to yield 10t/ha of grain will of course have higher feed value than a lower yielding crop but on mixed farms it might be difficult to persuade farmers to cut their best crops for forage!
October deadline for leaving
the EU, which still has the potential to undermine UK dairy markets depending on whether we leave with or without a deal and what sort of trade deal can be negotiated with the USA. As individuals, there is little that producers can do to influence the dairy market which means, as usual, focusing on the things that can be controlled and becoming ever more efficient.
PAGE 16 JULY/AUGUST 2019 FEED COMPOUNDER
Dairying in Denmark Some of you will know that herds in Denmark are typically intensive, high output herds (the average yield is over 10,000 litres/cow). I recently visited one of the highest yielding organic herds in Denmark – 200 cows averaging 14,000 litres (3x milking) at over 4% fat and 3.3% protein, which is impressive! Some key take-home messages for me from this farm were: • Grazing can be successfully integrated into a high output system (these cows were grazing (as per organic rules) for a minimum of 6 hours per day). • Do not compromise heifer growth rates – feed them to grow to calve at 22 – 24 months. • Breed cows capable of high dry matter intakes (> 28 kg/head/ day) and high production and feed them! • Produce and feed lots of excellent quality forage (in this case, grass/clover leys (up to 4 cuts), wholecrop and maize silage, all irrigated, > 60% forage in the TMR) and carefully evaluate concentrate inputs. • Keep the ration as consistent as possible – this farm is compact feeding TMR (and has been doing so for many years). Compact feeding, which involves soaking concentrates in water and pre- mixing, is not that common in the UK at the moment – some herds have trialled it with varying degrees of success.
Sexed semen Sexed semen usage continues to increase in the industry and now accounts for around one third of all dairy semen, up from a quarter two years ago. Limited outlets for dairy bull calves has helped fuel
Comment section is sponsored by Compound Feed Engineering Ltd
www.cfegroup.com
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