AHDB milk forecasting forum

AHDB Market Intelligence

https://ahdb.org.uk/dairy-markets

11th February 2020

Contents

• Latest position

• Herd size

• Milk yields

• Milk forecast

• Compositional quality

• Further information

Latest GB milk production• Dec-19 forecast put

2019/20 production at 12.58bn litres (+0.6% year-on-year)

• Production in line with forecast through to end December

• Lack of production growth in January and currently 2% down on forecast

• Concern over ground conditions and ability to turn cows out in the spring

Herd size

Inseminations

• Continual move from dairy to

beef over last four years

• Continual increase in level of

sexed semen (sorted) which

is helping to offset some of

the decrease in use of dairy

semen

• Notable increase in use of

sorted semen in the last year

• Expectation that sorted will

increase further in bid to

reduce unwanted bull calves

Inseminations - impact on dairy calf numbers

• Year-on-year drop in dairy calf

numbers expected through to

March 2020

• Small uplift in calf numbers

projected in Jun-Sep 2020

• Previously expected 0-6 month

olds in Sep-19 to be 230k.

Actual reported was 227k

• Historically, the actual level of

0-6 months has tended to be

slightly flatter than our

predictions suggest

Inseminations - impact on GB milk production

• Chart shows impact of dairy

inseminations, sexed semen

and net impact compared with

rolling 3 year average

• Negative net impact has been

reducing since mid-2018

• Net impact becomes positive

in early 2022

• Switch to sexed semen

starting to outweigh move to

beef inseminations

• Only impacts youngstock, and

retention rates can reverse

this

Cow numbers & herd ages

• Overall dairy herd down 1.9%

(49k) since October last year

• GB herd age structure continues

to confirm impact from

inseminations

• Biggest drop is in 2-4 year olds,

down 5.3% and equivalent to

90% of the overall decline

• 0-1 year olds still showing slight

drop, down 0.8% on last year

Retention rate• Retention of cows over 6

month period

• Rates continue to be low

compared with historical

averages

• Slight increase in retention

rates from April to July 2019

could be due to improved

weather and feed availability

• However, farmers are

continuing to hold on to fewer

animals, which is having a

negative impact on the overall

dairy herd size

Long–term herd size expectation

• AHDB projection of number of

cows in the GB dairy herd

• Based on predicted youngstock

numbers (from insemination

data) and 3 year average

retention rates

• Expectation that milking herd will

be around 1.72m by Oct 2020,

down 2% year-on-year

• Projection suggests herd will be

at 1.63m by April 2023, down 7%

on Oct 2019 (latest actual)

Herd size summary

• Calf numbers and youngstock are roughly in line with expectations from

insemination data

• Shift in inseminations continues and acceleration in that move expected going

forward

• Retention rates slightly improved on a year ago, and relatively stable at 89-90%

over 6 month period

• Herd size projections show long-term decline continuing, but offset by increasing

milk yields

Milk yields

Weather and ground conditions

• Scotland saw high rainfall in August

• England and Wales were wet from September to November

• December and January have been more in-line with long-term averages

• But grounds are already saturated = impact on turnout

Weather and ground conditions

• Scotland saw high rainfall in August. England and Wales were wet from September to November

• December and January have been more in-line with long-term averages

• But grounds are already saturated = impact on turnout

This slide contains public sector information licensed under the Open Government Licence v1.0

Promar Milkminder results

• Concentrate use per cow mostly

down from last season’s highs

• Still mostly above the 5 year

(2014-2018) average

• Significant increase in

concentrate use seen from July

onwards in 2018 due to lack of

forage

• Summer 2019 concentrate use

was lower, as expected

• Autumn concentrate usage still

on par with 2018.

Latest information from AHDB

Promar Milkminder results

• 2019 forage usage either

above of roughly in line with

5 year (2014-2018) average

• Proportion from forage

through the summer much

higher than in 2018, as

expected

• Autumn forage usage more

comparable with 2018.

Latest information from AHDB

National milk yields

• Historically used a 1.5% pa

uplift in yields

• More recently uplift has been

2.3% pa

• Apr & May 2019 yields were

highest of the last 5 years and

above 2.3% pa projection

• Summer and autumn yields

have been in line with a 2.3%

per year yield improvement

Promar milk yield information on AHDB website

Calculated concentrate feed price

• Concentrate prices have

been declining since Feb-19

• Decline likely due to

improved availability

compared to 2018

• Prices have been significantly

above the 5-year average

since Mar-18

Latest information from AHDB

Farm-gate milk prices

• Milk prices have been generally

increasing since May 2019

• Increases driven predominantly

by lift in butterfat and protein

levels

• Projected price based on

relationship between market

prices and farm-gate prices (3

month delay)

• Market forces would suggest

gradual increase in farm-gate

prices through to Apr-20

Latest information from AHDB – farmgate prices

Latest information from AHDB – projected prices

Milk to feed price ratio (MFPR)• MFPR improved through Jun-

Nov 2019 but dipped in Dec

• Feed prices have been

gradually declining but are still

above the 5 year average

• Farmgate prices have been

increasing Jun-Nov 2019

• MFPR has spent most of the

last two years below the 5 year

average, putting pressure on

farm margins

Latest information from AHDB

Milk yield summary

• Increase in milk production has come from yield per cow

• National average yield has been in line with the adjusted 3 year average yield using a

2.3% per year uplift

• Expectation was for less of a push on yields in 2019 compared to 2018, as better forage

availability lowered concentrate use

• Apr-Aug saw more forage and less concentrate used, but yields still up – helped by

improved cow condition in part

• Sep-Nov had concentrate use, forage use and yields that were all more in line with the

same period in 2018

• MFP ratio suggests high concentrate feeding still not a good long-term plan financially

Milk forecast

Preliminary 2020-21 Forecast• Preliminary projections for 2020/21

suggest it will be very similar to 2019/20

• Official forecast in March

• Spring-summer 2020 expected to be down on 2019

• No boost to yields from a winter of concentrate feeding as in 2018

• Marginal year-on-year gains expected from Aug 2020 onwards

• Risk that March and April 2020 could be significantly down on forecast e.g. if turnout is delayed due to wet ground

Compositional quality

Compositional quality

• Both butterfat and protein have

been increasing over recent

years

• Trend over last 5 years is:

• Butterfat up 1.2 points per year

• Protein up 1 point per year

• Long term trends in cross-

breeding – impact on milk quality

• Long term trends in calving

patterns – impact on seasonality

of milk quality 3.20

3.25

3.30

3.35

3.40

3.95

4.00

4.05

4.10

4.15

Pro

tein

%

Bu

tte

rfa

t %

UK compositional quality

Butterfat % Protein %

High solids due to high fibre

• The higher average NDF will be promoting the rumen microorganism‘s ability to saturate polyunsaturated fatty acids and so supporting butterfat levels.

• It is therefore likely that butterfat levels will remain elevated throughout the winter, while this season’s silage stocks remain a key component of diets.

Read the story here

Breeding herd impact

• Changing genetics have also

contributed to increasing butterfat

• The average butterfat content of

milk from Holsteins and British

Friesians has increased by 0.05%

and 0.10% respectively between

2014 and 2018.

• There has also been an increase in

the number of crossbred animals

• 0.08% overall uplift from breeds

• 0.07% from genetic improvement

• 0.01% from herd make up

Read the story here

Market information resources:

https://ahdb.org.uk/dairy-marketsSign up: https://ahdb.org.uk/keeping-in-touch

Dairy.MI@ahdb.org.uk

www.ahdb.org.uk

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