Milk prices have been rising slowly but surely on a regular basis and so too are dairy cattle prices, with demand for fresh cows and heifers rising by anything from £250 to £400 per head since the start of the year.
With the August Actual Milk Price Equivalent (AMPE) at 40.1p per litre – up 9% on the month, and more than double the all time low point of 15.5p in April, 2016 – and values continually nudging upwards, most dairy sales are witnessing 100% clearance rates. 
Add to that a shortage of available milking females to buy due to the fact that many producers AI’d their cattle to a beef bull when prices plummeted, and a reduction in the number of cattle coming in from the continent, and confidence in the dairy sector appears to be rising.
“Everything is looking positive right up to the end of the year at least,” said Wright Marshall dairy auctioneer, Simon Lamb, who sells many of the cattle at Beeston Auction Mart.
“Its all about supply and demand and with the number of females coming forward for sale down on the year, due to TB and the increase in the use of beef sires two years ago, there are not the cattle available,” he said.
“Numbers at our collective sales at Beeston would be down roughly 10%. We haven’t seen the dairy cattle coming in from the continent over the past six weeks either, as exchange rates are no longer in our favour.”
Previously, Mr Lamb said ‘hundreds’ of dairy cattle were being imported into the UK every month, which has now more or less dried up with the result being that Wright Marshall’s last two big sales were ‘very, very dear.’
“Average prices for fresh heifers across all breeds and all types, to include those with just three quarters, at our last sale were £1693 which is £250-£300 per head up since the start of the year,” he added pointing out that fresh cows look even dearer.
“Dairy farmers seem to go mad for anything giving 40 litres, to include second calvers right up to fifth and sixth calvers. Most cows will be up £300 since the beginning of the year and bottom end cows will be £400 dearer driven by the strong trade for barren or cast cows,” said Mr Lamb, who pointed out that autumn calvers were also being sought after.
At the last mid-month sale at Beeston, 41 calved cows averaged £1667; 63 pedigree calved heifers levelled at £1791 and 38 unregistered calved heifers at £1526. This compares to the last month-end sale at the same market where 27 calved cows levelled at £1485 and 60 fresh heifers realised £1652.
It’s been a similar story at Harrison and Hetherington’s Borderway Mart, at Carlisle, where the last club sale met a 100% clearance and 44 lots sold at or above the £2000 mark. Overall, 61 fresh heifers averaged £2003 with 34 cows in milk at £1956.
How long the milk price and dairy cattle values will continue to rise, however, is another matter, with the latest data from Promar’s Milkminder costed dairy herds, pointing to an increase in herd size.
According to the figures, the top 20% of producers by margin over purchased feed (MOPF) per cow, have increased their average herd size by 5%, in comparison to the average performers of the national sample, which have increased by 2%.
Nigel Davies, Promar’s consultancy manager, said this demonstrated a new positivity there in the sector, with the top 20% having greater confidence to grow their enterprises.
“While milk price received ultimately has a considerable bearing on MOPF, those herds in the top 20% can also attribute significantly better margins to their greater technical ability,” he said.
“Looking at 12 months absolute performance to May 2017, the MOPF for the top 20% outstrips the average by £411 per cow per annum, equating to £41,100 per 100 cows.
“Breaking this down further, £242 per cow stems from the fact that the top 20% received a higher absolute milk price over the 12-month period compared to the average – a premium which has narrowed considerably in recent months. 
“Importantly, however, the remaining £169 per cow, comes from achieving an improved technical performance compared to their peers irrespective of milk price received,” added Mr Davies.
“In physical terms, the top 20% have sold 827 litres more for just an extra 212kg of purchased feed per cow. This is the kind of superior performance that makes a difference to confidence.”
However, he added that achieving this will have been about excellence at much more than just concentrate management. It will have involved a sustained focus on reproduction efficiency, cow health and a whole host of other factors, including the ambition of the herd owner and manager to be the best that they can be. 
“Producers should really drill down into their figures to understand where improvements can be made. Using an industry benchmarking service, can also help to really highlight areas of focus for the greatest gains, and ultimately, give individuals the strength of confidence to progress and develop their farm businesses.”