Despite the hot dry summer, many dairy farmers have been able to maintain milk production levels by using precious silage stocks and bought-in feed, resulting in a challenging autumn and winter.

That was the key message from AHDB's recent Milk Forecasting Forum which twice a year brings together key industry experts to discuss national production and factors that could impact on it over the coming months.

While many dairy farmers will still be hoping to harvest a least one other cut of silage, low levels of winter feed will leave farmers with the unenviable choice of destocking, drying off early or buying in more feed.

Add to that the increase in the demand for feed, at a time when growing conditions have been poor, and already higher concentrate feed prices, alongside higher usage of bought-in feed, will hit farmer margins.

Previous AHDB modelling suggests there is a strong relationship between the milk to feed price ratio (MFPR) and milk yields. If concentrate feed prices increase and milk prices remain stable, the MFPR will reduce. This in turn tends to lead to lower milk yields. Based on this modelling, if nothing else changed, a 10% increase in concentrate feed costs would be expected to lead to a 2-3% drop in milk yields, and 160m litres less milk in the country over the back six months of the year. Under such circumstances, to maintain milk yields, average farmgate milk prices would need to rise by a similar amount to feed costs, to support the MFPR.

The price of concentrate feed is only one element of the issue. Forum attendees also reported that the maize crop has suffered in many parts of the country. Low maize yields and lack of grass silage will see farmers forced to buy in fodder as well as concentrate feed.

In addition, the cost of mechanised feeding, slurry management and additional labour after a very challenging spring will mean the impact on margin could be severe.

An alternative option is to destock and the industry has already seen a rise in the number of cull cows being sent for slaughter, with 9000 head (19%) more throughput in July compared with July last year. This will be a mix of beef and dairy cows, and from a dairy perspective, this currently appears to be mainly low yielding or dry cows. However, a reduction in the overall milking herd would reduce national milk production even further.