UK Milk Production

The table below shows that for the month of January 2016, we were producing more milk than in January 2015. It also shows that we have produced more milk in the period from April 2015 than in the corresponding period from April 2014, by 3.28%. This is of no surprise to anyone, as the weather has been kind, and all the signals from a year or so ago were to encourage you to produce more milk. After all, that is why the milk quota brake was removed. The Irish in particular have responded to the removal of quotas very strongly.

Milk Production – UK Monthly Deliveries To Dairies

Year January Deliveries Month Change on Previous Year Year to Date (from April) YTD change on Previous Year
(in millions of litres)
2016 1,226 2.6% 12,426 3.28%
2015 1,194 1.27% 12,031 6.25%
2014 1,179 11.33% 11,323 4.03%
2013 1,059 10,884
This table is taken from data published by AHDB Dairy

The table below is very interesting. It is looking at the average daily milk production statistics for the end of February and early March, the most recently available data. The last week of February and the first week of March are both showing a reduction in milk production on that of 2015. Could this be the first sign that the rise in UK milk deliveries has come to an end?

If that is the case, it is about time too, and really should come as no great surprise. All the signals from the market are that extra milk is not wanted, it is going into intervention, and the price you are paid is lousy. Of course, it is too early to say that there is now a trend downwards, and it may go up again. It may all be weather-related, so it could be a false signal in terms of trends, but it does suggest a peak may have been reached.

Seven Day Rolling Average UK Milk Production

Year Week to 05 Mar Week to 27 Feb Week to 20 Feb
(in millions of litres)
2016 39.76 39.80 39.51
2015 39.96 39.88 39.50
Three Year Average (2013-15) 38.65 38.61 38.12
Difference: 2016 v 2015 -0.20 -0.09 0.01
Difference: 2016 v 3year av 1.11 1.19 1.38
This table is taken from data published by AHDB Dairy

We are seeing milk production fall in New Zealand, by 2.7% from June 2015, and a fall of 0.6% in Australia. Even in the U.S., where butter price has remained strong and where milk production is still rising, it seems as if the rise is tailing off. In recent months the increase has been at a rate of well under 1% pa.

To discuss further, contact Charles at charlesholt@fcgagric.com or your local FCG office.

Posted in Lincoln.