Milk Prices to Play Role in Dairy Herd’s Impact on Beef

Sun, 24 May 2015

ANALYSIS - How beef supply is affected by UK dairy farming in the future as it looks to expand without the shackles of quotas will hinge partly on how it can deal with market volatility.

Milk markets are now more volatile and this seems “set to continue”, which could limit the future supply of beef coming from the dairy herd, according to the latest EBLEX insight.

In the article Life after milk quotas for the UK beef industry, EBLEX intimated how the processor price cuts could have knocked confidence out of the market.

Last, year, farmer intention surveys showed 33 per cent of farmers were looking to expand their milk output.

And despite milk prices being "pretty dire", Nick Everington, chief executive at the Royal Association of British Dairy Farmers, expects expansion to continue.

He told TheDairySite that RABDF concerns centred on redressing the supply and demand balance and ensuring there was a market for milk produced.

“I’m not saying people aren’t growing – they’re taking a rain check at the moment,” said Mr Everington.

“It’s a pretty delicate situation at the moment but herd size is going to grow.”

He said farmers can weather the storm with sound calf rearing protocols for cows with longevity and productivity and by maximising milk price through optimising components.

He wants to see the next generation of cheeses and yoghurts come onto the market.

"The RABDF message is for producers to think carefully about where their product is going – communication with processors is vital," he concluded.

In its analysis, EBLEX drew attention to the potential role of sexed semen in maximising dairy returns.

By prioritising high yielding dairy heifer genetics on the most productive animals, the lower percentiles can then be freed up for beef cross breeding programmes, explained Steve Dunkley EBLEX regional manager for the North East region.

He told TheDairySite that a growing proportion of beef is coming from the dairy segment - Defra figures show a four per cent rise in cull cow slaughter last year.

“I think one option is for more sexed semen weighted towards replacing heifers, this frees up cows that can be inseminated with beef genetics.”

“I think what will happen with quotas gone is expansion. But we don’t want more and more black and white bull calves – we need a market for them.”

Further afield, EBLEX sees other member state dairy expansion as a potential threat to beef production, particularly in Ireland.

“This will likely further reduce beef cow numbers there and, hence, the availability of Irish prime beef on the British market in the longer term,” EBLEX concluded.