Dairies urging their suppliers to produce milk on a more consistent year-round basis are justified, say the Dairy Industry Association Ltd (DIAL) and the Federation of Milk Groups. New research by the two suggests the industry would gain overall if a flatter output
profile could be achieved. However, it recognised farmers would need compensation for the higher costs of producing milk in autumn and early winter.
Many dairy farmers’ average production costs are lower if they concentrate on high spring production. But this leads to increased costs for the dairy processors who, last year, were forced to process 23% more milk daily in May than in November. Liquid milk demand is uniform throughout the year.
Many milk buyers have been stepping up the premiums they pay their farmers for their off-peak output. Some have begun penalising farmers whose output is heavily weighted towards spring output.