Despite the uncertainties of Brexit hanging over British farming, UK dairy farmers continue to expand production in response to good milk prices. In January, UK milk production increased 3% year on year to just under 1.3bn litres. This growth trend has continued into the second month of 2019 with February milk production also up by 3% year on year to just under 1.2bn litres.

This brings milk production for the first two months of 2019 to a cumulative 2.4bn litres, which is 4% ahead of the same period last year. According to AHDB, UK dairy cows are recording strong milk yields this season, which is supported by increased concentrate feeding.

“On average, yields were 2.4% above the previous year between November and February. Additionally, a relatively mild winter has diminished earlier concerns over feed availability, and cows are reported to be in good condition. Although herd numbers are on a downwards trend, increased yields are more than offsetting this. Overall, the stage is being set for volumes to be high in the coming year,” said AHDB’s dairy research division in a note last week.

The UK research body added that if weather conditions remain normal for the coming year, the UK is likely to see its highest level of milk production in almost 30 years.

Dairy prices

Meanwhile, dairy markets will be supported by the upward movement in oil prices. On Monday, Brent crude oil moved above $70/barrel for the first time in months. Oil economies account for about 30% of all dairy imported in the world and a lift in oil prices should support demand in the short to medium term with these important buyers.