Spring milk curbing reduces production forecast

Thursday, 25 June 2020

By Kat Jack

The impact of the coronavirus and lockdown on GB milk production has brought our 2020/21 forecast back by 83 million litres, compared to our March forecast update. Our June forecast sets production expectations for the season at 12,437 million litres, down 0.7% on 2019/20.

The impact of lockdown

After coronavirus and lockdown closed the foodservice market, several producers asked their farmers to reduce milk production, which took the cap off the spring flush. We estimate that reduction action took around 55 million litres off production over April and May, helping to avoid further oversupply on the market.

However, these actions will continue to take some of the edge off production in the coming months. Cows dried off early won’t milk again until they next give birth, and cows culled from the herd won’t return at all. However, the culling of lower performing cows may curb milk in the short term but should improve herd performance in the longer term.

The easing of lockdown is gradually allowing foodservice to reopen, which should help bring more demand to the markets. However, social distancing measures still remain and it will still be some time before foodservice is back to full swing. 

 

Weather impacting feed supplies

The weather has become another big concern recently, particularly in May, as dry weather impacted grass growth and silage cuts. Reports suggest first cut silage quantities were significantly down for some farmers, and second cut is going to stem early, which will affect quality as well. June rains have helped recent grass growth averages but some regions are still struggling.

In 2018 we saw that a dry summer led to higher concentrate feeding and increased production. This year, UK arable crops have also been struggling in the dry weather, adding to the disruption brought by the flooding early in the year. This could raise the price for UK feed. Good maize supplies in the Americas may help imports. Additionally, the lockdown is also affecting feed markets, as the loss of pub demand has left some breweries unable to provide the usual amount of brewer’s grains.

Overall, the feed situation could be tighter this year, as could farmer finances.

 

The production year ahead

We are currently forecasting GB milk production to continue running behind last season for the first half of 2020/21, followed by some marginal year-on-year growth in the latter half of the season and an uncurbed spring 2021. The forecast will be reviewed again in September.

 


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Katherine Jack

Analyst - Dairy

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