Milk production in Europe and the UK has tipped into undersupply thanks to heatwave conditions pushing down supply.
According to the latest data from AHDB, GB milk production is estimated to be down by 18.5 million litres so far and counting, due to heatwaves.
The levy board warned that dairy cows were particularly susceptible to heat stress because high milk production generates substantial metabolic heat.
Prior to the first heatwave in May, production was running at 1.6 to 2% above the five-year average. However, during the heatwave it declined to only 0.4% above that average, according to AHDB lead analyst (dairy), Susie Stannard.
“The first heatwave probably lost around 5.8 million litres before the cows recovered back to pre-heatwave levels, which didn’t happen until mid-June despite much more moderate temperatures,” she added.
During the peak of the second heatwave at the end of June, production on a seven-day rolling average basis was running 2.9% below the five-year average.
“Accounting for the post-event effects, we have seen a loss of an estimated 12.7 million litres so far (the data period ends 4 July where we are still seeing residual effects),” she added.
Stannard warned that with a third heatwave in progress there could be “further supply challenges in July” and “as many of the heat stress effects are cumulative, we may expect to see even more pressure on milk supplies”.
As a result, milk prices are on the rise with Arla, Freshways and others increasing farmgate prices.
Freshways MD Bali Nijjar said the past six months had been “challenging” thanks to “intense competition arising from record levels of milk production and persistently low spot market prices”, alongside increased costs. However, thanks to softened demand the business was increasing its price by a minimum of 3ppl.
“Whilst market returns remain under pressure, particularly from a butterfat perspective, we fully recognise that current farmgate milk prices are not sustainable for the long-term future of our farming partners,” he added.
Spot milk prices have risen to 38-48ppl, well above Defra’s average farmgate milk price of 34.2ppl.
“This suggests some anxiety amongst processors about milk availability, at least in the short term,” said Stannard, who warned that markets may well become “unpredictable in the coming months”.
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