The English dairy cow herd has expanded for the first time this century, boosted by higher returns and the imminent removal of production quotas – although the growth comes as cuts to milk prices loom.
The overall UK cattle herd grew by 0.2% to 5.37m head in the year to the beginning of June, the first increase in four years, data from farm ministry Defra showed.
The rise was fuelled by expansion in dairy cow numbers which, of breeding age, rose by some 30,000 head to 1.14m head – the first increase since 1999.
The growth rate of 2.6% is the highest on records going back 30 years – during which only two other years, 1994 and 1999, witnessed increases in dairy cow numbers.
Quota removal
The rise in numbers came amid a boost to dairy margins both from falling feed prices and elevated milk values, which UK-wide rose 7.6% in the year to May to 32.27p per litre, according to Defra.
Furthermore, many producers in the UK, as in neighbouring Ireland and other European Union countries with relatively low production costs, are gearing up to lift milk output after quota limits are removed next year.
UK milk output, of which England is responsible for the great majority, rose 6.9% in August to 1.19bn litres, a 15th successive month showing a year-on-year increase in volumes.
Production in 2013-14, to March, rose 5.4%, the biggest increase in at least 20 years, and reversing a slide from peak levels a decade before, with productivity growth failing to make-up for falling cow numbers.
Price reversal
However, the period of rising milk prices has already come to an end, with values in August down 7% so far this year, and further cuts in the pipeline for next month, a reflection of tumbling dairy commodity markets.
With effect from October 1, First Milk is to cut milk prices by 3p per litre, while some Dairy Crest suppliers face a reduction of 1.75p per litre.
Muller Wiseman Dairies is to cut prices for some producers by 1.8p per litres.
The retreat in world dairy prices reflects in part higher production in the UK and other EU countries such as Ireland, besides in major exporting nations such as Australia and New Zealand.
Source: Agimoney