There are several positive developments offering good news for the dairy sector after the unprecedented challenges of the past year.

A new report by Kingshay reveals that after a drop in milk prices to an average of 36.49p per litre in July 2023, values have steadily increased. However, prices still do not fully cover production costs or provide adequate compensation for family labour, according to the report.

The gap between the highest and lowest milk prices has fluctuated, reaching a peak of 13.8ppl in March 2023 before narrowing to 11.6ppl in March 2024.

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Kathryn Rowland, Kingshay’s senior farm services manager, noted: “It’s clear the UK milk market is changing as retailers and consumers demand more.

“Given the increased focus on climate change, it is essential that the market can deliver premiums to cover the extra effort and costs on-farm.

“Milk processors like First Milk are already offering premiums for regenerative farming practices and going forward, it is likely that the range in pricing even within contracts – let alone between them – is going to widen.”

Trends over the past decade show that while average milk yields have slightly increased and remain in the mid-8000 litres per cow range, milk solids have hit a new record of 646kg per cow, marking almost an 11% increase over the past 10 years, outperforming the 5.4% rise in milk yield. This improvement is likely due to producers focusing on feed efficiency and meeting milk contract requirements.

Average herd sizes have increased by two head per year, now standing at 219 cows compared to 185 in 2014. Stocking rates have also risen, reaching 2.39 cows per hectare compared to 2.25 a decade ago.

Adverse weather conditions led to a 3% decrease in milk from forage last year, to 2691 litres per cow, though Scotland saw a 16% year-on-year increase.

In terms of herd health, there have been improvements in nearly all areas. Mastitis cases have decreased to an average of 26 cases per 100 cows, indicating better management, facilities, breeding and record-keeping.

However, lameness has increased, jumping by four cases per 100 cows to 37, likely due to poor weather conditions affecting grazing access and extending housing periods.

Mobility scores remain unchanged from last year, with 5.9% of the herd scoring two or three, suggesting changes in lameness recording practices.

Fertility trends have returned to normal following the hot summer of 2022/23, which had negatively impacted oestrus cycles. The calving interval has narrowed to match 2021/22 levels at 393 days, with days to first service at 70, one day longer than in 2021/22.

The 200-day not-in-calf rate is at 12%, 1% below 2021/22, and the infertility culling rate has returned to the previous year’s 6.7%.

The cost of an extended calving interval has decreased from £5.89 per day per cow to £4.88 per day, mainly due to lower milk prices and feed costs.

Efficiency varies broadly across production systems, with all-year-round calving herds focused on housing, producing the highest margin per cow (£2495 per cow) and autumn/split block calving herds focused on grazing achieving the highest margin per litre (29ppl).

Similar trends in milk prices were observed in organic herds, with the margin over purchased feed per cow dropping by 13.9% to £2048 compared to £2380 the year before. Although organic herds are generally larger than conventional ones, their size has also grown by 19% over the past decade to 243 cows.