UK Dairy Herd Size Reaches Record High as Industry Consolidates

According to figures from consultants Kingshay, the average dairy herd size for the year ending March 2024 has climbed to 219 cows, marking an 18.4% increase from a decade earlier when the average was 185 cows. This growth reflects the ongoing consolidation within the industry, with farms becoming larger and more efficient.

However, the pace of herd size expansion appears to be slowing. In March 2004, the average herd size was just 131 cows, indicating a significant increase over the past two decades, but the growth rate has decelerated in recent years. At the same time, stocking rates have also hit a record high, with an average of 2.39 cows per hectare, up from 2.25 in 2014 and 2.16 in 2004.

Milk Yields and Solids Show Gradual Improvement

While milk yields have remained relatively stable in recent years, averaging in the mid-8,000 litres per cow range since 2019, the long-term trend has shown a slight increase. For the year ending March 2024, the average milk yield reached 8,441 litres per cow, a 5.4% rise from 8,010 litres per cow a decade ago. Milk solids have also seen a notable improvement, reaching a record 646 kg per cow, representing an 11% increase over the past ten years. This rise in milk solids is likely due to producers placing a greater focus on feed efficiency and meeting milk contract requirements.

Increased Spending on Feed and Concentrates

The report highlights that concentrate use reached a record high of 2,753 kg per cow in 2023/4, despite feed prices being the second-highest on record. Although the average price of concentrates was slightly lower than the previous year at £339 per tonne, spending on other purchased feed remained elevated at around £80 per tonne. This brought the total purchased feed cost to £1,012 per cow, a significant increase from £692 per cow a decade ago.

Fluctuating Milk Prices Impact Margins

Milk prices have experienced considerable volatility over the past decade, ranging from a high of 32.24ppl in 2014 to a low of 23.65ppl in 2017. In 2023, prices peaked at 46.18ppl before averaging 38.19ppl in 2023/4. These fluctuations have had a direct impact on farm margins:

2014: £1,890 per cow and 23.59ppl
2017: £1,337 per cow and 16.71ppl
2023: £2,863 per cow and 33.86ppl
2024: £2,210 per cow and 26.18ppl

Kathryn Rowland, Kingshay’s senior farm services manager, emphasized the critical importance of milk prices in determining farm profitability. "Despite the challenges posed by weather conditions, feed costs, and the improving technical performance of farms, margins remain closely tied to milk prices. It is essential for producers to continue meeting milk contract targets to maximize their income," Rowland stated.

The report underscores the necessity for dairy farmers to focus on both production efficiency and strategic market positioning to navigate the challenges of price volatility and rising input costs.