Category: Dairy & Livestock

Production

The AHDB is reporting GB milk deliveries in November were down by 2.8% compared with last year (Defra figures will not be available until the New Year).  GB production for the month totalled 977 million litres, a fall of nearly 29 million litres on the year.  However, this time last year milk prices were very high, peaking in December at 51.60ppl, compared with the current price around the 37-38ppl mark (see Key Farm Facts).  At this price producers will not ‘push’ cows for the extra litres and production may further reduce thoughout the winter.  In its latest revised forecast the AHDB has reduced production estimates for the 2023/24 milk year by 1.3% to total 12.22 billion litres.  Furthermore, this is entirely driven by lower yields as BCMS data suggests the herd size remains stable.  The global picture is similar.  Production in September was down marginally by -0.7%, but as the milk price falls, production is slowing.

Prices

Falling milk production together with an increase in demand as we approach Christmas, is resulting in some strong upward price movements for UK wholesale markets.  On the global market, after ‘stuttering’ in November (see last month’s article) the average GDT Price Index recorded a 1.6% increase at the latest event held on 5th December to average $3,323.  Both SMP and WMP experienced gains; +1.2% and 2.1% resepctively.  But the big mover was Cheddar, up by +9.7% to average $3,986.  The next event will be held on 19th December and it will be interesting to see if this ‘positivity’ continues – if seems like the market is at a turning point.

In terms of farmgate milk prices, the most notable announcement is from Arla giving a 0.89ppl increase from 1st December for its suppliers of both conventional and organic milk.  This means the UK manufacturing price will be 36.1ppl and 43.54ppl respectively.  Significantly, in its announcement Arla Foods amba board director, and Arla farmer, Arthur Fearnall, said ‘This announcement is a step in the right direction for our cooperative business. Global milk supplies are slowing down in major production areas and retail sales continue to pick up after the turnaround in Q3. Global commodity markets are also recovering……The outlook is positive‘.

Defra has released the UK livestock numbers from the June 2023 Survey; the table below summarises the figures.  As can be seen, for both the cattle and pig breeding herds, and the sheep breeding flock, numbers are down on 2022.

The total cattle breeding herd has declined by 1.9%.  However this is mainly due to fall in beef breeding numbers as the dairy breeding herd has only experienced a marginal decline.  This probably reflects the tight margins in the beef sector; even though prices have been strong over the past couple of years, input costs have also been high.  This sector has historically been reliant on the BPS.

The estimates show after a couple of year’s of increasing numbers, the sheep breeding flock has experienced a 2.4% decline.  Notably ewes intended for first time breeding are down by 6.1%, suggesting further contraction of the breeding flock.   The sheep sector has received good prices for a few years now, but high costs continue to erode margins.  The number of lambs under 1 year old are down by 6.1% – a reflection of the smaller lamb crop which could support prices in the New Year.

The economic climate for pig producers, although still challenging, is much better than this time last year, even so the breeding herd continues to contract.  The female breeding herd decreased by 1.5%; falling to 338,000.  This is the lowest it has been in the past 21 years.  However gilts in pig saw a rise of 13%, suggesting some herd re-building is now happening.  The large reduction in the total pigs number will partly be due to last year’s figure being high as pigs were having to remain on farm due to problems in the processing sector; there was an 11% fall in the number of fattening pigs, which now stand at just under 4.3 million.

The full Survey results can be found at https://www.gov.uk/government/statistics/livestock-populations-in-the-united-kingdom?utm_medium=email&utm_campaign=govuk-notifications-topic&utm_source=faece29b-aa70-4496-8b89-e9c18d6142db&utm_content=daily

Further to our article earlier in the month, further cases of bluetongue have been identified.  These are all in cattle and on holdings that are situated in the existing north-east Kent Temporary Control Zone (TCZ) and follows active surveillance.   This brings the total number of cases, as at 16th December, to 22 on 8 different holdings. Defra continues to say there is ‘currently still no evidence that bluetongue virus is circulating in Great Britain’.  Surveillance is ongoing.

Defra has announced a £4 million support fund for small abattoirs.  Through the Smaller Abattoir Fund (SAF), capital grants of between £2,000 and £60,000 will be available at 40% of eligible costs. There will be a set list of items (this doesn’t appear to be available just yet) that will be funded, but in recognition that each abattoir has different specialisms, requirements and challenges, Defra has said it will consider additional investments that aren’t on the list.  Applicants will be asked to provide evidence that the investment aligns with at least one of the fund’s aims, objectives, and eligibility criteria.  These are to;

• improve productivity,  
• enhance animal health and welfare,  
• add value to primary products,  
• encourage innovation the use of new technologies.  

To help with cash flow, applicants will be able to make up to 3 applications to a total of £60,000 to make the most out of the fund. 

The SAF will be accessible to FSA-approved mobile and static red meat and poultry abattoirs in England only.  The Fund will be open to red meat abattoirs processing up to and including 10,000 farmed livestock units (LSU) per annum (i.e., bovines, sheep, goats, pigs, farmed venison), and poultry abattoirs slaughtering up to and including 500,000 birds per annum (i.e., chickens, turkeys, geese, ducks, capons, hens).  Throughput will be calculated using FSA quality-assured throughput data for the 2022 calendar year.

The RPA will be contacting eligible applicants in the coming days with the official guidance and application forms. They will also share details of webinars to learn more in the New Year.  The application window will be open until 30th September 2024 or until all the money has been allocated to successful applications.

For those who have further questions about applications or the Smaller Abattoir Fund it is possible to email [email protected] or call 03000 200 301 and select the ‘Smaller Abattoir Fund’ option. 

The first cases of Bluetongue have been confirmed outside of Kent.  This follows the first case in a sheep, identified (in Kent) on December 7th.  The latest cases have been found in cattle on a farm near Cantley, Broadland, Norfolk. This brings the total number to 11 animals on 6 different premises.  All animals have been humanely culled to prevent further transition.  Defra continue to advise that there is currently no evidence that Bluetongue virus is circulating in GB and surveillance continues.

A 10km Temporary Control Zone (TCZ) has been declared around the premises in Norfolk.  Following the cases identified on 4th December 2023, the 10km TCZ has been extended to cover the whole of North Kent, the location of this can be found via https://assets.publishing.service.gov.uk/media/656e3dfa0f12ef07a53e01f0/BTV_TCZ_declaration_BTD_2023_01-06_North_East_Kent.pdf

Animal movements out of the TCZ are currently not allowed.  Movements into or within the zone are only allowed under licence.  You can apply for a specific movement licence (see https://www.gov.uk/government/publications/bluetongue-apply-for-a-specific-movement-licence) if there is an urgent and genuine welfare need to move animals, or you need to move animals from:

• a premises within the TCZ to another premises within the TCZ
• the free area into the TCZ permanently (for example, breeding stock)
• the free area or within the TCZ to go direct to slaughter within the TCZ
• the TCZ to go direct to slaughter at a designated abattoir in the free area within 100 miles of the premises of origin

From 13th December, all livestock farmers who export meat to the EU will need to have had an annual health visit from a vet.  Under the new regulations, evidence of a health visit will be required where livestock, or animal products derived from livestock, enter the food chain and may be exported to the EU.  Producers will be required to get a Vet Attestation Number (VAN) (see https://www.gov.uk/government/publications/veterinary-declaration-for-animal-health-visits) which will need to be recorded on Food Chain Information (FCI) documents.

Farmers in England can get their VAN when they receive an Annual Health and Welfare Review (see https://www.gov.uk/guidance/sfi-annual-health-and-welfare-review).  In addition, those who are members of the following assurance schemes (which already require an annual health visit from a vet) are not required to do anything extra.  They are able to use their membership number:

• Red Tractor
• Quality Meat Scotland (QMS)
• Farm Assured Welsh Livestock Beef and Lamb (FAWL)/Welsh Lamb and Beef Producers Ltd (WLBP)
• Lion Quality
• Poultry Health Scheme.

The UK’s largest doorstep milk delivery operation, Milk & More has been sold.  Freshways, the large middle-ground processor has moved into the household delivery market with its purchase of the business from Muller.  Milk & More was originally part of Dairy Crest and was acquired by Muller as part of the overall takeover in 2016.  It has never seemed to sit entirely comfortably within the wider Muller operation, despite significant investment going into the business in recent years.  Whilst milk deliveries remains at the core of Milk & More it has expanded to also deliver a wide range of other groceries.

Legislation to ban the live export of animals has been laid before Parliament.  The Animal Welfare (Livestock Exports) Bill was introduced on the 4th December.  This would prevent the export of cattle, sheep, goats, pigs and horses intended for slaughter (not for breeding) and was one of the Bills announced in the Kings Speech.  It only applies to Great Britain and not Northern Ireland.  It is unclear whether the legislation will get through the Parliamentary process before the General Election next year, or early 2025.  

Production

The AHDB has estimated GB milk deliveries declined by -2.8% year-on-year in October.  Defra’s UK milk deliveries will be available on 30th November.  The wet weather meant many could not take advantage of the good autumn grass growth, having to bring cows in early.  Although some input costs have fallen, others remain high and with current milk prices there is little incentive to push yields.  The AHDB is currently forecasting a -0.5% decline in GB deliveries for the 2023/24 milk year.  Global milk production started to fall year-on-year in August and is now expected to only experience a 0.1% growth in annual production.

Prices

Wholesale markets have seen an uplift over the last couple of months.  These have been supported by results from the GDT events through September and October.  However, at the two auctions held in November the index fell by -0.7% at the earlier one and remained level at the last auction, averaging $3,268.  UK farmgate prices continued to trend downwards in November, but with reduced production and an increase in demand prices appear to be stabilising.  Meadow Foods, Barbers and Wyke Farms have all announced price holds for December.

GB Producer Numbers

In a recent survey carried out by the AHDB, it is estimated that there are 7,500 dairy producers in GB as at October 2023.  This is a decline of -4.5% (350) compared with October 2022.  The AHDB has highlighted the fall in milk price as the ‘major diver’ in the decline in numbers.

GB pig prices have started to decline over the last couple of months.  Before that, finished pig prices had been rising steadily through the first part of the year.  The UK spec GB SPP peaked in August at 221.8p per kg deadweight, some 27.2p per kg more than year-earlier levels.  But since August, prices have been on a downwards trajectory.  The latest price for the week ending 18th November 2023 stood at 213.5p per kg; a marginal -0.1p per kg fall on the week, although still 16.2p per kg above the same week in 2022 and comfortably above the 5-year average.

One of the key reasons for the decline in domestic prices is the fall in pig values across the EU, where prices have dropped by 30.7p per kg since the end of July.  GB prices are heavily influenced by the EU as it is the main supplier of imported product.  Demand for pigmeat has also experienced a decline, both domestically and globally, with the cost-of-living crisis impacting the consumption of most meats.   According to Kantar, the volume of pig meat purchased through retail has fallen by -2.6% for the 52 weeks ending 1st October 2023.  In addition, estimates show supplies have picked up over the last couple of months together with a moderate increase in carcase weights.  All these factors suggest prices are likely to remain under pressure.