WHILE the oversupply of milk on the world market has resulted in significant milk price reductions over the past year, and consequently, herd dispersals, there have been a few positives, with lower feed costs and improved forages helping to increase feed efficiency.
That was the welcome news from Kingshay senior farm services manager, Kathryn Rowland, who pointed out that the most recent year has seen a little relief in production costs of milk.
“Reduced input prices and improved forage, have contributed to improvements in average feed use efficiency, saving the average herd 1.2ppl,” she said.
“There is potential for many herds to improve efficiency further too, as the top 10% ranked by milk from forage saved 2ppl in feed costs compared with the average at a similar cow yield.” 
Mrs Rowland, who was basing her figures on this year’s Kingshay Dairy Costings Focus report, said that for an average herd which sold 1.6m litres in 2015-2016, this is a saving of £32,000 per year on purchased feed.
“Identifying any potential changes to achieve savings may be helped using the data in the costings report as it gives farmers a unique opportunity to see the typical efficiencies of many different systems,” said Mrs Rowland.
“This can help set realistic targets for an existing system or show what might be achieved by comparing different management options. 
“This year, the report includes new comparisons of robotic milking versus twice a day milking and three times a day milking plus different winter forage options.”
According to the report, the rolling average milk price for Holstein/Friesian milk over the year reduced by 5.7p per litre to 24.4ppl.
However, for many producers, the milk price actually received in the year to March, 2016, is far from average, with continuing increases in market segmentation clearly evident when data is ranked on rolling milk price received. 
“The highest 10% paid received 31.3ppl, whereas the lowest 10% averaged 18.7ppl,” she said.
“This gap in the rolling annual price paid has widened to 12.6ppl from 6.9ppl in the year to March, 2015.” 
When the annual data is compared with the previous year, it showed the response of the lowest 10% band for milk price had been to increase herd size by an average of 32 cows. This resulted in an increase in total milk output by 23%. 
In contrast, the highest paid 10% reduced cow numbers and saw a small increase in average total milk sales recorded.
Copies of the costings report can be downloaded at www.kingshay.com