Processors facing flood of milk as supplies surge

Annual output set to increase by 150 million litres on back of strong autumn grass growth

SURGING milk production over the last two months has transformed output predictions for the year.

Supplies for October are running 20pc ahead of last year, and dairies predict that increased production will continue into December on the back of excellent grass growth and strong prices. A 2pc lift in total supplies for 2018 is now forecast.

The sharp recovery in supplies through the back end has totally changed the outlook for the year, with suggestions during the summer drought of a 1-2pc fall in milk output for 2018. However, this has now given way to projections of a 2pc growth in output.

Given that national milk supplies last year totalled 7.27 billion litres, a 2pc lift in production equates to an additional 150m litres.

Both Lakeland Dairies and Dairygold have reported a 20pc lift in October milk supplies, with the increases for September being 12pc and 8pc respectfully.

A spokesman for Lakelands said the co-op expected deliveries to “remain strong” for November-December.

Dairygold said the big lift in supplies last month relative to 2017 was skewed somewhat by the impact of Storm Ophelia on milk deliveries in October last year. However, the coop is forecasting a 2pc lift in overall supplies this year.

Similar increases in milk production were reported by Kerry Group, Arrabawn and Glanbia.

October supplies were 19pc ahead of 2017 levels in Kerry, with September deliveries up 7.5pc.

Arrabawn predicted that milk out- put for the last three months of the year would be 20pc up on 2017.

Meanwhile, a very strong last quarter for milk supplies to Glanbia is forecast to drive a 3pc lift in overall deliveries to the processor this year.

Processor predictions for backend milk supplies tally with the latest CSO figures which found that milk deliveries to all dairies were up 9.4pc in September, increasing from 654m litres in 2017 to 715m litres this year.

Cashflow

Excellent grazing conditions and high milk prices are driving on deliveries, Teagasc’s Joe Kelleher said.

Although average grass growth across the country has slipped to around 25kgDM/ha over the last week, dairy herds are still out day and night across much of the south and west, with good dry matter and energy in the grass.

Mr Kelleher pointed out that milk solids are very high, with fat at around 5pc and protein at 4pc. This has resulted in milk prices of 40-42c/l including bonuses.

The Teagasc specialist claimed many farmers were keeping late-calving and empty cows milking as a means of improving cashflow up to Christmas. Farmers contend that it is more profitable to keep cows that are not in calf milking rather than offload them in the marts for low prices.

Cows straight from the milking parlour made a base of 80-85c/kg in Kilmallock and Bandon, with those dry for three weeks or so averaging around €1.30/kg.

A top of €2/kg was paid in Kilmallock for cows, with finishers doing the majority of the buying.