Milk yields held back as feed prices rise

Tuesday, 14 December 2021

By Chris Gooderham

As part of our Milk to Feed Price Ratio calculation, we estimate concentrate feed prices from the latest straight prices. Off the back of the increases in straight prices, we would have expected average concentrate feed prices to be up at £287 per tonne by November. However, according to the latest numbers from Promar and Kingshay, the actual concentrate prices have been sitting around £12 per tonne lower than our expectation over the last three months.

graph of concentrate dairy feed prices

This is likely a combination of good planning by farmers who have bought ahead, and changes to blends to reduce the inclusion of the more expensive straights, replacing them with less costly alternatives.

The efforts to keep cost increases to a minimum has kept our Milk to Feed Price Ratio in the stable zone. If concentrate costs had risen in line with straight prices, we would be significantly into the contraction zone by now.

  graph of milk to feed price ratio

Despite efforts to limit the impact of rising feed costs, we have seen milk yields suffer over the last few months.

We normally expect to see milk yields rise by around 2.3% each year. However, between July and November this year average milk yields have shown no improvement compared with the same period in 2020. For the month of November, average yields were actually 1.4% down on November last year.

The drop off in milk yields is the main cause of GB milk production falling further behind last season through the autumn.  


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Chris Gooderham

Head of Market Specialists - Dairy & Livestock

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