Milk price hits dairy margins – numbers fall on year

It estimates that there were 7,500 dairy producers in GB as of October 2023, down 350 on the year, although there is no change reported from the previous survey in April.

Most of this decline is put down to the fall in farm-gate milk prices. In September, the Defra UK average milk price stood at 36.36p per litre – a drop of almost 13ppl compared to the same month in 2022.

In addition, farm margins have also tightened over the past year due to farm costs such as energy, fuel, feed, and fertiliser which remain historically high.

However, while producer numbers have been reduced, the average amount of milk recorded per farm has grown year on year, indicating a shift towards larger farms. Production remains steady compared to volumes calculated in April this year.

Furthermore, with high milk prices in the latter part of 2022, many farms pushed their cows for increased yields to maximise benefits. However, as 2023 progressed, producers have been focused more on improving efficiency and reducing on farm costs.

This has been aided by improved grass growth, which for the majority of the 2023 season has sat above the previous season and the five-year average, sustaining milk yields from grazing cows.

In recent months, GB milk production has begun to ease with volumes in September and October down year on year by 1.3% and 2.7% respectively, a trend that is likely to continue.