Large dairy herds are growing rapidly, both in terms of size and productivity, according to the annual Kingshay Dairy Costings Report.
Based on actual figures from almost 2,000 herds with 400,000 cows across the UK, smaller herds produced less milk in 2017/18 than the previous year, likely due to the summer drought curbing production from grazing.
In contrast, the higher producing herds boosted milk output by progressively larger amounts, rising by 1.2 per cent in the 0.5-1 million-litre bracket all the way up to a 5.1 per cent increase in the over 5m-litre band.
Not only have the highest producing herds boosted milk yields per cow, they have grown their herd size by an average of 17 cows, to 743-head in 2017/18.
This trend can be seen in each of the past three years.
Kathryn Rowland, senior farm services manager at Kingshay, says: “Higher output herds are less reliant on grazing, so the summer drought had less of a negative impact than in lower output herds. Larger herds are also more likely to be on aligned contracts, with a more stable milk price enabling a continued investment programme to increase output.
“Margins increased steadily in line with overall herd production, from £1,287/cow in the smallest bracket to £2,120/cow in the largest group.
“In addition, the largest producers tend to benefit from improved efficiencies and clearly have an appetite for continued expansion.”
It should be pointed out the large herds have a disproportionately high impact on UK milk production.
Herds producing more than 5m litres represented only 3 per cent of the report’s costings, and yet contributed 14 per cent of the total milk sales and accounted for 27 per cent of the year-on-year increase in production across the whole pool.
Looking ahead, Ms Rowland says global production is under pressure, which could maintain relatively firm milk prices.
“However, another dry summer, alongside high concentrate costs, means it is vital to keep striving for marginal gains in health, production and expenditure, by benchmarking against the top producers to secure the same success.”
Other notable trends from the report
■ For the first time in the past decade, the average herd size dropped, with culling rates up from 27 per cent to 29 per cent, probably due to the lack of forage
■ Unsurprisingly, milk from forage eased back to average 29 per cent of overall yields versus 31 per cent last year
■ However, producers managed to keep yields up by feeding more concentrates. On average, yields came in at 8,352 litres this year against 8,172 litres last year, while concentrate use increased from 2,584kg/cow to 2,683kg/cow
■ Input prices have generally increased over the past year, with concentrates reaching a five-year high in 2019
■ Milk prices have improved from 28.78ppl to average 28.99ppl; not enough to offset the higher costs of production, so the average margin over purchased feed declined from £1,729/cow to £1,713/cow
■ Lameness stepped up from 38-40 cases per 100 cows, with mastitis remaining at 39 cases