Fears the summer’s heatwave could strangle dairy supplies have failed to materialise, latest production figures suggest.
According to the AHDB’s UK milk production forecast for the 2018/2019 season, output recovered soon after the heatwave broke in early August.
The previous forecast, published in June, had projected milk production would be some 74 million litres down on the prior year, equal to a 0.6% decrease. However, production recovered quickly in August and September after the hot weather ended, bringing the current predicted yearly deficit to 27 million litres.
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Indeed, milk production across the EU had seen “little or no immediate impact” from the hot summer, which saw the driest June in the UK since records began, AHDB said. It means there are now “few concerns” over the potential shortage alluded to later in the year, putting buyers in a stronger position to negotiate and seeing butter and cream wholesale prices fall on the wholesale market throughout September.
However, an AHDB spokeswoman added the “challenging summer” had caused uncertainty around winter feed supplies, which might hit production in November-January.
It comes as Tesco’s Sustainable Dairy Group last week pledged to up the price it pays its farmers by 1.07p to 31.24ppl for the quarter from 1 November. Other quarterly-reviewed retailer-aligned suppliers also have also seen modest increases in farmgate prices, despite the value of milk falling in September, according to AHDB.
The levy board suggested some downward pressure could be on the cards later in the year after producers saw an average 4.1% rise in prices paid at the farmgate during the heatwave, since which processors including First Milk and Müller have held prices.
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