Despite good grass growth and strong prices, GB milk deliveries remained subdued through April with the trend continuing well into May, according to the latest figures from AHDB Dairy.

For April as a whole, GB deliveries totalled 1,084m litres, 34.4m litres lower, or 3.1% than in 2021. Similarly, the first three weeks of May have shown GB deliveries running 2.7% behind previous year volumes.

Peak yield was reached on May 6, with a daily figure of 37.0m litres – 2.5% lower than the highest individual day in 2021, and the lowest ‘peak day’ since 2016.

Global milk deliveries also remain down year on year, with all of the key producing regions recording lower deliveries for March, with the exception of Argentina.

In total, March deliveries were estimated to be 0.7% lower than last year. High input costs continue to challenge farm budgets, and despite rising milk prices, production remains down year on year.

The steady climb in dairy wholesale prices, which during April saw several processors increase milk prices by up to 5p per litre, was dampened through May as production hit the spring peak. With processing capacity stretched, and buyers stepping back from the market in hopes of lower pricing, most dairy products saw prices weaken in May. Cheddar was the exception to this, as tight availability continued to push up prices.

According to AHDB, the actual milk price equivalent (AMPE) fell 2% in May as the value of skimmed milk powder (SMP) fell and butter values remained unchanged on average. On the other hand, the milk for cheese value equivalent (MCVE) rose further to just over 53ppl, in line with higher Cheddar prices. On balance, this has seen the average milk market value (MMV) increase by another 0.7ppl.

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Farmgate prices in GB have seen significant increases so far through 2022. The GB average price in March for all milk was 36.17ppl, although recent price increases will boost this average to around 42ppl-43ppl depending on the milk buyer. Despite the significant increases in milk prices since January, there has been no noticeable increase in milk production.

There has been no respite in the cost of inputs either, a situation which is likely to remain while the war in Ukraine continue, according to the report which states that high gas prices continue to feed through into fertiliser prices, although some stability was seen in domestic pricing in April. Availability is said to remain an issue.

Feed prices also remain high in historic terms, with little hope of a change in direction given the outlook on markets for feed ingredients. While there has been good grass growth this spring, it remains to be seen how much this will help offset the cost of bought-in feed later in the year.

Meanwhile, AHDB's most recent survey of major milk buyers suggests that there has been a 2% reduction in the number of milk producers in GB. In April, 2022 there were an estimated 7880 producers, a fall of 160 compared to the same survey undertaken 12 months previous. This is a also a slower rate of exit than has been seen in previous years.

Latest figures also suggest that the average volume of milk produced per farm in GB is 1.57m litres – level with October 2021figures and up slightly on April 2021.