Milk Matters


By Christine Pedersen Senior Dairy Business Consultant The Dairy Group


christine.pedersen@thedairygroup.co.uk www.thedairygroup.co.uk


For many, life is slowly returning to ‘normal’ as we learn to live with the risk of Covid-19 although local lockdowns are likely to be a feature for the foreseeable future. “The easing of lockdown and the progressive opening of business has heralded a stable dairy environment with sustained market recovery,” reports my colleague Nick Holt-Martyn. He goes on to say “markets have resumed their normal relationship, with liquid and cheese holding up the core UK price, while the bulk powders flex to the conditions”. Brexit is dominating the news agenda once again and leaving the December 2020 with no trade deal in place poses


EU transition on 31st


an existential threat to the farming industry. No sector escapes without serious challenges at least and for some a great deal of unknowns.


Global Tariffs (£/t) Butter


Cheddar Liquid


UK


1580 1390 1800


EU


1699 1497 1953


Source: Defra Statistics and The Dairy group The table above shows the tariffs in place as of the Agriculture


Bill 2020. While on the surface it looks quite balanced and reciprocal it hides a multitude of issues, principal of which is that the UK is not currently registered as a third country and cannot export products of animal origin (meat, dairy, eggs, honey etc) to the EU. The registration process is underway! Each sector will have its own issues arising from the import/export


balance with the EU. Sheep are possibly hardest hit, with 29% of exports hit with 45% tariffs, with France alone buying 9% of the UK supply. Failure to export would crash UK prices. Beef exports around 16% of supply with the EU dominating, taking 90% of UK exports, but as the UK remains only 75% self-sufficient the 65% tariffs are likely to lead to a rise in prices as market balance is found with domestic supply. The UK has agreed roll-over arrangements with 18 trading partners


which covers around 40% of food export trade which leaves 60% of exports to the EU in jeopardy. Dairy is around 90% self-sufficient in terms of fat and protein, but exports tend to be commodities and raw milk for processing, whereas imports are dominated by cheese and yogurts. This raises the problem of processing capacity to make the products that consumers want. With tariffs at 30-40% and milk exports across the Irish border at 800 M litres it is difficult to see past a nightmare no deal scenario and how the market could find a balance. If up to 800 M litres of Northern Irish milk is looking for a home in the GB processing industry, it is hard not to see prices falling as the market struggles to cope. Unless you know what changes are coming, how can any business plan for the outcome other than to strive for greater resilience? We can


PAGE 10 SEPTEMBER/OCTOBER 2020 FEED COMPOUNDER


only hope that, by the time my next column is published, deals have been agreed and businesses can plan with some certainty. I think it’s fair to say that the weather has been erratic this year.


Globally milk supply remains subdued running at around +1.0% growth between the major exporting blocs as we await the start of the Southern hemisphere milk year. Heat and some dry conditions have affected UK August supply, but the recovery is underway following significant rainfall in many areas down the western side of the country leading to improved grass growth. The dairy farmers that I work with are based in southern England


and growing conditions tend to lend themselves to maize silage which can form up to 75% of the forage in housed rations. Generally, the weather this growing season has suited maize with reports of 16 t DM/ha + crop yields at the beginning of September as I write. In general, grass silage crops have also yielded well and for those with excellent forage stocks and pressure on clamp space, increasing the cutting height of maize to improve maize silage quality is a conversation that many of my colleagues and I have had with clients. A refreshing change after a couple of years of challenging forage growth; improved forage stocks and quality certainly set a positive tone for the prospect of increasing milk from forage which is a key factor affecting profitability. In my last column I wrote about the challenges for cows coping with


heat stress. The combination of air temperature, radiant temperature, air velocity and relative humidity amplifies the effect of heat stress and these are seen at lower temperatures than might be expected. The link between ambient temperature and relative humidity led to the development of the Temperature Humidity Index (THI) in the 1950s. Initial studies conducted at the University of Missouri indicated


that cows were experiencing heat stress at a THI of 72 and greater. More recently, THI was re-evaluated at the University of Arizona on high-producing Holstein dairy cows which are much more susceptible to heat stress than the cows of the 1950s due to the increased feed intake and milk production. These recent studies show that cows become heat-stressed starting at an average THI of 68 with the levels of stress increasing with increasing THI values. Typical humidity levels in UK are between 60 – 90% during summer months and at these levels, cows can suffer from heat stress at temperatures as low as 24°C. There is also evidence that heat stress has most impact when


it comes in short periods with no time for cows to adapt to the rising temperatures. This is exactly what we have seen this summer; some short bursts of higher temperatures have left cows visibly heat stressed. The effects of heat stress on dry matter intake and milk production are immediately evident and well documented. Heat stress also has a big effect on reproductive performance and recent research suggests that the effects on fertility can start at even lower THI than the effects on milk production. Most options to minimise the possible impact of heat stress are


not quick solutions and require some prior thought and planning – e.g. providing shade for grazing cattle, ensuring that there is adequate ventilation for housed cows or installing fans or sprinkler systems. I will be sitting down with clients this autumn to understand the impact that heat stress had on their businesses this summer and to develop a future strategy to reduce the effect.


Comment section is sponsored by Compound Feed Engineering Ltd www.cfegroup.com


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