Milk Matters
By Christine Pedersen Senior Dairy Business Consultant The Dairy Group
christine.pedersen@
thedairygroup.co.uk www.thedairygroup.co.uk
Has European Weather Turned the Milk Market on its Head? “The topsy turvy weather across Europe this summer has not only affected milk production, but is now changing the tone in the market from a Spring supply surplus and mid-Summer market declines, to weak supply and a rising market,” says my colleague Nick Holt-Martyn. He goes on to say: “Through August European markets have been firming as supply faltered in the biggest three milk producers, Germany, France and UK, with even Ireland noting a decline in growth for the rest of 2021.” On European markets commodity prices are picking up with Butter
around €4,000/t and Skim Milk Powder (SMP) €2,500 which is on a par with AHDB UK Wholesale prices at the month end. Butter and SMP are now 7% and 16% ahead of their 2020 level and likely to progress further in the Autumn if supply stays at or below 2020 levels.
a further shift in the UK calving pattern. Taken together with cost inflation, particularly feed costs through supply and logistics issues and variable forage quality, milk supply looks set to be subdued well into the winter helping to bolster the markets and keep farmgate prices firm to rising. Inflation and any interest rate response is set to be an issue in the
next two years as Global Covid recovery takes place. With inflation of both returns and costs, farmers are unlikely to feel better off particularly as direct payments (Basic Payment Scheme) decline. Rising farmgate milk prices will mask the underlying challenges to profit margins going forward.
Maize Harvest 2021 By the time this is published, producers will be preparing for maize harvest if they haven’t started already. Maize harvest 2021 is at least two weeks later than the 2020 harvest. Due to the two distinct drilling periods this spring and resulting variation in maturity, harvest may be split into two different time frames if crops are to be harvested at the optimum dry matter. The following points should be considered by farmers to allow them to harvest, store and feed the highest quality crop possible:
• Target whole-plant dry matter (DM) at harvest is 30 – 32% • Target silage DM at feeding is 32 – 35% (clamping losses typically 2 – 4 %) • Check crops regularly and liaise with contractors re harvest date • Don’t assume that the contractor knows what cutting height and chop length is required and monitor the crop as it is harvested • Clamp, consolidate and sheet maize quickly to preserve nutrients
Source: The Dairy Group, AHDB The graph above shows the UK Wholesale prices over the last 14
months. The standout feature is the steady drift upwards, epitomised by the cheese sector, but matched by the more variable Butter and SMP. Both Butter and SMP had declined from their Spring peaks on the back of a stronger supply and favourable weather. With the change in the weather comes the change in the supply and a corresponding change in markets. While supply remains subdued markets are likely to maintain the progress with further firming of prices. Arla recently notificed producers of a September milk price cut.
This has not been linked to markets returns, but cost pressures and inflation, with stability forecast thereafter. The analysis above suggests that a reversal may be possible in the months ahead. The UK supply has gone from a record peak in May in milk
volumes, butterfat and protein production to quite normal levels in just 2 months. While weather has certainly played its part it may indicate
PAGE 22 SEPTEMBER/OCTOBER 2021 FEED COMPOUNDER
Crop Dry Matter should be continually assessed in the weeks leading up to and during harvest. Research indicates that the best feeding and financial results are likely to be achieved from maize silage dry matter in the region of 32 – 35% harvesting when the whole plant dry matter is 30 – 32%. Where the dry matter of maize silage is outside of these parameters, the intake potential and feed value will be compromised and storage / wastage problems are more likely:
• Lower dry matter maize silages have poorer intake characteristics and will produce more effluent. • Higher dry matter maize silages (> 35%) are more difficult to ensile and are more prone to spoilage – secondary / aerobic fermentation.
As the crop matures the percentage of starch increases as sugar
comes down. Starch can increase by up to 4% per week. At the same time, fibre digestibility reduces by about 1% per week so the increase in starch far outweighs the reduction in fibre digestibility.
Cutting height is a balance between quality and quantity. The lower part of the plant is of low feed value and is relatively wet – research
Comment section is sponsored by Compound Feed Engineering Ltd
www.cfegroup.com
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