Category: Dairy & Livestock

Production

Milk production ended the calendar year strongly.  UK deliveries for December 2024 were 4.2% higher than in December 2023 and 4.7% up on month-earlier deliveries.  After a steady start to the the milk year (April-March) production has seen good gains since September.  Strong milk prices have supported the increase in production and, although the Christmas demand peak has passed, milk price announcements have held pretty firm so far for 2025, supporting the increase in output.

Prices

The majority of purchasers held prices for January as, although production is up, stocks remain relatively low, particularly butter in the UK.   However, within the retail aligned contracts, Sainsburys has lowered their price for the second month in a row; down by 0.05ppl in January.  In terms of manufacturing contracts Arla Direct has increased its price in January by 0.86ppl.  However Arla UK suppliers will receive a -0.27ppl ‘quarterly currency smoothing adjustment’.  Barbers held their price in January and have announced a stand-on in February, for the third consecutive month.

With regards to the global markets, results from the Global Dairy Trade (GDT), often seen as the bellwether, have been mixed over the last few events.  The decline in the average index at the the last event of 2024, was followed by a further -1.4% drop in the overall GDT Price Index at the first auction in January, before recoverying by +1.4% at the event held on 21st January to stand at $4,146.  This compares with $3,493 in January 2024.

Defra has extended the Avian Influenza Protection Zone (AIPZ) to help mitigate the risk of further outbreaks of the disease.  From Monday 27th  January 2025 the APIZ already in force across East Riding of Yorkshire, City of Kingston Upon Hull, Lincolnshire, Norfolk, and Suffolk will be extended to also include the unitary authorities of Shropshire, York and North Yorkshire.  This means captive birds in these areas must be housed and enhanced biosecurity measures need to be followed.

In addition, an AIPZ mandating enhanced biosecurity but without mandatory housing came into force on Saturday 25th January 2025 across all other areas of England, with a similar zone also applying in Scotland (see https://www.gov.scot/news/avian-influenza-prevention-zone-2/).  The latest situation can be found on the Defra website at https://www.gov.uk/government/news/bird-flu-avian-influenza-latest-situation-in-england?utm_medium=email&utm_campaign=govuk-notifications-topic&utm_source=a3e357f9-f7b5-4a45-b805-c9b91fb3f973&utm_content=daily

The deadline for those invited to submit a full application for a Laying Hen Housing grant has been extended.  Those looking to receive funding to add a veranda onto, or to upgrade or replace existing laying hen or pullet housing to improve animal health and welfare now have until midnight on 28th April 2026 to apply.  More information on applying can be found via https://www.gov.uk/government/publications/laying-hen-housing-for-health-and-welfare-grant-round-1?utm_medium=email&utm_campaign=govuk-notifications-topic&utm_source=4fca9099-1d98-4ed1-b9a4-fb0b283514b3&utm_content=daily

Dairy farmers are now eligible for Endemic Disease follow-up funding under the Animal Health and Welfare grant.  Readers may recall under an ‘Improve Animal Health and Welfare’ (IAHW) agreement, livestock keepers can receive funding for;

• an animal health and welfare review
• an endemic disease follow-up

The latter was added in 2024 but was unavailable for keepers of dairy cattle.  This is now available and the table below includes the grant rates for each species for both parts of the service;

More information on the funding can be found at https://www.gov.uk/guidance/farmers-how-to-apply-for-funding-to-improve-animal-health-and-welfare

The Government has introduced measures to prevent the spread of Foot and Mouth Disease (FMD) following a case being confirmed in water buffalo in the State of Brandenburg in north west Germany.

A ban has been placed on the commercial import of cattle, pigs, sheep, deer, buffaloes and their products such as meat and dairy from Germany.  GB health certificates will no longer be issued for animals susceptible to FMD including all live animals and fresh meat and animal products.

In addition, as of 15th January it is no longer permitted for travellers to bring unpackaged meat, meat products, milk and dairy products, certain composite products and animal by products of pigs and ruminants into Great Britain from the EU, EFTA  states, Faroe Islands and Greenland.  Furthermore, these products may not be brought to Great Britain from Germany, even if commercially packaged.

The Government is encouraging keepers to be vigilant and maintain good biosecurity measures.  Although FMD poses no risk to human or food safety, it is a highly contagious viral disease of cattle, sheep, pigs and other cloven-hoofed animals and can cause significant economic effects due to production losses in the affected animals as well as loss of access to foreign markets for animals, meat and milk for affected countries.

Production

After a slow start to the milk year (April-March), autumn production has pushed up overall deliveries.  GB production, according to the AHDB, is estimated to have totaled 1,018 million litres in November, up 4.4% compared with November 2023.  For the season so far (April – November) GB production is at 8,279 million litres; 0.4% above the same period in 2023.  Stronger farmgate milk prices, lower feed costs and (according to AHDB) an increase in Autumn block calving, has seen an increase in milk production over the last few months.  In contrast, GB organic deliveries, for the period April – October are estimated to be down by 9.3% on the year to 203.21m litres.

The expectation is for conventional production to remain strong until the end of the milk year due to higher farmgate prices underpinned by strong commodity markets.  The AHDB is forecasting GB milk production for the current milk year to reach 12.43 billion litres; 0.9% more than 2023/24.

Producer Numbers

The latest AHDB survey reveals dairy producer numbers in GB have fallen to 7,200.  This is a reduction of 30 since the last survey in April.  However, when compared with last October’s survey, numbers are down by 300, indicating the majority exited the industry last winter, when margins were particularly challenging.  Better prices throughout the summer looked to have help stemmed the outflow.  The survey also shows the average milk production per farm in GB has now risen to 1.7 million litres per year, showing the continued trend towards fewer, but larger farms.

Prices

Commodity markets are starting to ease as the Christmas trade comes to an end and milk deliveries continue to increase (see above).  However, in the UK, manufacturers have limited stocks meaning prices remain supported, at least for the time being.  But there is an expectation that prices will experience a seasonal decline in the New Year.  At the latest Global Dairy Trade event held on 17th December the overall index fell by -2.8% to average $4,148; this is by far the largest decline since July, the only other two being by -0.4% and -0.3% in September and October respectively.  An early look at farmgate prices for January show both Barbers (Cheese) and First Milk holding their prices.  The former having risen its price for 11 of the 12 months in 2024.

An Avian Influenza Prevention Zone (AIPZ) has been declared across the East Riding of Yorkshire, City of Kingston Upon Hull, Lincolnshire, Norfolk and Suffolk.  The introduction of an AIPZ follows the recent increase in cases of bird flu in poultry and other captive birds in the area and increased reports of ‘mass mortality’ in wild birds.  In these areas all bird keepers must take enhanced biosecurity actions, remain alert for any signs of disease and report suspected disease immediately to the Animal and Plant Health Agency.  As at 15th December, there is no requirement to house birds in the AIPZ, but this is being kept under constant review.  The latest information and a map showing the AIPZ can be found at https://www.gov.uk/government/news/bird-flu-avian-influenza-latest-situation-in-england?utm_medium=email&utm_campaign=govuk-notifications-topic&utm_source=59ca1e7a-629c-4851-9236-404fdf9a750f&utm_content=daily

Defra has released the UK livestock numbers from the June 2024 Survey; the table below summarises the figures.  As can be seen, for all categories of breeding livestock the numbers are down on 2023.

The total cattle breeding herd has declined by 1.9%, the same percentage change as last year, although this year it is entirely down to a fall in beef breeding numbers as the dairy breeding herd has remained stable.  The beef price has been exceptionally high this year and data suggests there has been an increase in heifer slaughterings as producers take advantage of this (see our beef production article https://abcbooks.co.uk/beef-production/).  This is likely to mean fewer replacements coming into herds and a continual decline in beef breeding numbers next year.  Historicaly margins have been tight in the beef sector and it has been been reliant on the BPS.

The sheep breeding flock has fallen below 15 million for the first time since 2011.  Notably, ewes intended for first time breeding are down by -8.6% on the year, suggesting further contraction of the breeding flock next year.  The sheep sector has received good prices for a few years now, so this is a worrying trend.  Like the beef sector it has been supported by the BPS.  It suggests producers are evaluating their options with the BPS now almost gone in England and due to begin being phased-out in other parts of the UK soon.

The economic climate for pig producers, is much better than this time last year, even so the breeding herd continues to contract.  The female breeding herd decreased by 3.1% to 327,000.  This is the lowest it has been in the past 22 years.  However gilts in pig have risen for the second year running, this year by 4.6% (last year by 13%), suggesting some herd re-building is now happening.  The number of fattening pigs increased by 0.9%, with falling sow numbers this suggests productivity per pig is increasing.

The full Survey results can be found at https://www.gov.uk/government/statistics/livestock-populations-in-the-united-kingdom .

The AHDB has updated its forecasts for beef production in 2024 and 2025 following an increase in prime cattle and cow slaughterings.  According to Defra the number of prime cattle slaughtered in the UK over the first 10 months of the year has increased by 5% compared with 2023, to 1.78 million.  The majority of the increase has been driven by heifer slaughter, with the biggest uplift experienced in the 3rd quarter of the year.  In October prime cattle slaughter increased 13% year-on-year.  This could mean keepers taking advantage of the high prices resulting in fewer heifers being retained for the breeding herd.  The year-to-date slaughter numbers in England and Wales have risen by 5%, Scotland has remained stable but Northern Ireland has seen a 12% rise in numbers.

Due to the increase in recent slaughter numbers, the AHDB has revised its slaughter forecast for 2024 upwards to 2.11 million head; 4% higher than in 2023.  However, taking this higher slaughter number into account for this year and current UK cattle data, it is expecting a sharper decline in slaughter numbers in 2025.  It is now forecasting a 6% reduction compared with 2024 and 2% lower than 2023; totalling 1.99 million head.

It is a similar story with cow slaughterings.  Defra figures show that over the first 10 months of the year, 511,000 cows have been slaughtered, up 3% over the same period in 2023, with the uplift mainly due to beef cows – which is likely to mean further declines in the beef breeding herd, especially as we have already seen an increase in heifer slaughter.  Cull cow slaughterings in October were 9% up year-on-year.  Again, Northern Ireland has seen a big uplift, a record kill of 47,000, up 13,000 since the previous month.  The increase in cow cullings has seen the AHDB revise its figures for 2024 upwards to 624,000 head, 2% higher than in 2023.  For 2025 the forecast is for UK cow slaughter to total 599,000, 4% lower than 2024 and 2% less than in 2023.

In terms of beef production, prime cattle carcase weights are averaging 1.4kg heavier than in 2023 at 344kg, this, combined with slaughter estimates, means AHDB is forecasting total UK beef production in 2024 to be 933,000 tonnes – up 4% compared with 2023.  For 2025, it is forecasting total UK beef production to decline by 5% on the year and to be 2% less than in 2023 at 883,000 tonnes.

Currently prime cattle prices are at a record high.  The GB deadweight all steer price for the week ending 30th November was 538ppkg, up nearly 56ppkg on the year.  With supplies being higher than expected, strong demand is supporting farmgate prices.  There is usually an uplift in prices as we head towards Christmas, but this good demand should bode well for farmgate prices into 2025.

Production

Domestic milk deliveries have been increasing steadily since September.  According to data from the AHDB, GB milk deliveries for w/e 16th November increased by 0.5% compared with the previous week and are now running 4.9% above the same week in 2023.

Prices

The Global Dairy Trade (GDT) average price index increased by 4.8% and 1.9% respectively at the events held in November.  The average price now stands at $4,089 per tonne – the first time it has been over $4,000 since July 2022 and is 25% higher than at the same time last year.  Farmgate prices also continue to increase, two notable rises from 1st December are:

• a 1.5p per litre increase for suppliers to First Milk, taking its manufacturing standard litre to 45.35ppl
• Barbers has announced a 1.53p per litre increase to take their standard litre to 46.10ppl.