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GB milk production matches 5 year low in July
Tuesday, 16 August 2022
GB milk production totalled 1,025 million litres in July, equal to the five-year low from 2018 and in line with our baseline milk production forecast. This brings production in the season to date (Apr-Jul) to 4,308 million litres, 1.5% (65 million litres) behind the same period in 2021.
Average daily deliveries in July were 33.06 million litres per day, 0.6% lower than last year. The seasonal drop off in average daily deliveries in the beginning of the month was relatively flat. However, extreme heat in the middle of the month, followed by little to no rain, accelerated the decline in the latter part of the month. Data for the first 6 days of August shows that average milk deliveries are 1.6% behind the same time last year.
While the year-on-year deficit for July is less than what we saw in June, this reflects the relatively faster drop-off in production this time last year. At that time, feed prices had been rising for a prolonged period of time and had started to impact on margins and yields.
Since then, we have seen high price inflation across all key inputs, which has meant farm finances have now been under pressure for at least 12 months.
Looking ahead, our latest dairy market outlook suggests we could see milk deliveries for the full season (Apr-Mar) drop by between 1.0% and 3.8%, depending on the severity of cash flow pressures facing farmers. Details of the various scenarios can be found in the full report.
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