March 4, 2025

UK - Global dairy costs of production: 2024 bought some relief to costs

Increased production costs have been felt across the globe in recent years. According to Rabobank, a 14% average increase in dairy cost of production from 2019 to 2024 in the key dairy exporting regions was recorded. The majority of this increase has occurred since 2021, putting pressure on margins and retail prices alike and squeezing production globally.

Key influences

The cost of production increased for all eight regions studied (Argentina, Australia, California, China, Ireland, New Zealand, the Netherlands and the Upper Midwest). Key input costs (which include feed and fertiliser prices) increased at farmgate level, influenced by the Ukraine war, challenging weather conditions, rising energy prices, trade disputes, shipping costs, and other supply chain disruptions, coinciding with post covid inflation. Increased interest rates further increased overhead costs.

Feed costs, which rose by 19% on average, remain the top influence on cost of production for all regions. They account for at least 48% of total productions costs for producers in California, the US Upper Midwest, China, Australia and Argentina.

Labour, typically the 2nd or 3rd biggest cost, also increased during this period, with low availability and higher wages pressuring margins.

Read Annabel Twinberrow's analysis from AHDB on the relief in 2024, regional highlights, and future outlook.

UK - Field-by-field data helping to measure regenerative impact on dairy farms

Pioneering field-by-field data has been helping dairy farmers measure the real-world impact of regenerative farming as they work to roll out greener methods.

Nestle has been working with First Milk, a farmer-owned dairy co-operative in Ayrshire and Cumbria that supplies milk for products like KitKats and Nescafe. The consumer giant pays farmers bonuses for taking measures to protect and enhance the natural assets on their land, such as rotational grazing, restoring hedgerows, cutting down herbicide use, enriching the lives of cows, promoting biodiversity and engaging with communities.

In efforts to monitor the real-world impact of these changes, First Milk has been gathering data of what is happening on every single field managed by 80 farmers in the regenerative programme for the last few years.

The data set, thought to be the first of its kind on this scale, contains detailed information on what is going on in each field on every This includes the number of hedgerows, whether multi-species pastures have been planted, where cows are rotationally grazing and how watercourses are being protected.

The co-operative can then monitor farmers' regenerative journeys and work with them on where new actions could be taken depending on their land. The data also aims to track which regenerative interventions are - and are not - working as farmers carry out worm counts or test water holding capacity and levels of carbon in the soil.

Ashley Swan, Commercial Executive at First Milk, said: "Without that detail, we don't know whether we're going in the right direction or not."

The co-operative is also gathering data on the amount of carbon measured in the soil on farms, starting with baseline measurements taken by the firm Agricarbon in 2021 - the first-of-its-kind soil carbon capture project.

www.independent.co.uk/climate-change/news/nestle-matt-ryan-ayrshire-dalston-trust-b2702976.html

UK - New calf milk even closer to cows' milk for better calves

A unique patent-pending fatty acid technology brings an Energized Calf Milk even closer to cows' milk, boosting gut resilience and calf performance. Milkivit ONE from Trouw Nutrition is the only milk replacer containing Lactofat Pro, a unique fatty acid technology which helps balance the fatty acids in the milk replacer.

"Bovine milk fat contains over 400 fatty acids," explains Dr Laura Tennant from Trouw Nutrition. "Milk replacers based on vegetable fat sources are deficient in the shorter chain fatty acids that play a crucial role in the development of the gastrointestinal tract and the rumen.

"Previous attempts to supplement milk replacers with these essential fatty acids have been hindered by issues with palatability and digestibility but LactoFat Pro allows Energized Calf Milk to be supplemented effectively."

Milkivit ONE is a 27% fat, 23% protein Energized Calf Milk containing 50% skimmed milk and 100% dairy protein for optimum digestion and low osmolality. Fat is the most energy dense ingredient in milk replacers and the high fat content supports higher energy intakes. Milkivit ONE supplies a superior nutrient supply compared to traditional calf milk replacers, helping maximise health and calf performance both pre- and post-weaning.

The superior balance of fatty acids has been shown to elevate calf health by supporting better development of the gastrointestinal tract and rumen. Calves fed Milkivit ONE in trials had reduced incidence and severity of diarrhoea with lower treatment days. Improved rumen development led to a 26% increase in starter feed intakes over the milk feeding period where calves were fed milk ad lib..

"Milkivit ONE is a next generation Energized Calf Milk which is the closest a milk replacer has been to cows' milk which nutritionally should be gold standard for milk replacer formulation. The patent pending Lactate Pro technology delivers a better-balanced fatty acid profile maximising health and performance in pre-weaned calves helping get calves off to a better start to life," Dr Tennant comments.
TrouwNutrition

UK - Secure your feed future: choose home-grown protein

With the looming EU Deforestation Regulations (EUDR) set to shake up soya imports, dairy producers have a golden opportunity to take control of their protein sources now. The uncertainty surrounding imported soya-marked by traceability requirements, supply chain segregation, and deforestation concerns-could lead to price volatility and potential shortages beyond January 2026.

Chris Davidson, Head of Procurement at AB Agri's ruminant division, warns that shippers are still figuring out how to meet these new regulations, leaving future soya availability unclear. Market fluctuations, weather disruptions in South America, and shifting global demand add further instability, making it difficult to lock in future supplies.

For those looking to avoid uncertainty, NovaPro from Trident Feeds presents a compelling solution. This UK-grown, high-energy rumen by-pass rape expeller offers a sustainable alternative to imported soya, ensuring feed security while supporting fellow British farmers.

With a carbon footprint just one-seventh* that of soya and proven performance benefits-including a University of Nottingham trial showing an extra 1.7 litres of milk per cow per day-NovaPro provides both economic and environmental advantages.

"Taking action now means securing a cost-effective, home-grown feed source while sidestepping the risks and premiums associated with imported soya," Davidson explains. "By choosing NovaPro, producers can future-proof their herds and reduce their carbon footprint-all while supporting British farming."

https://www.tridentfeeds.co.uk/products/novapro/?utm_source=BD&utm_medium=newsletter&utm_campaign=Novapro23&utm_id=Novapro

UK - Dairy retail performance - 25 January 2025

During the 52 weeks ending 25 January 2025, volumes of cow's dairy declined by 0.5% year-on-year (NIQ Homescan POD, Total GB). Spend on cow's dairy grew by 0.8% year-on-year, driven by growth in average prices of 1.3%.

Cow's milk volumes continue to decrease (-1.8%) year-on-year (NIQ, 52 w/e 25 January 2025) with a corresponding decline in spend of -4.6%, driven by a decline in frequency of purchase and volume purchased per trip. Declines were seen for both semi-skimmed and skimmed cow's milk, while whole milk continued to see volume growth (+2.8%).

Cow's cheese remains in volume growth, up 4.2% year-on-year, and spend increased by 2.5% despite average prices decreasing by 1.6% (NIQ, 52 w/e 25 January 2025). Cheddar, which represents 41.4% of all cow cheese volumes, saw a 5.0% increase in volumes. Almost all cow cheeses saw volume growth which the except of Stilton and British blue cheese that declined 1.1% year-on-year.

Cow's butter, at a total level, saw a volume decline of 3.4% and a spend decline of 0.1% (NIQ, 52 w/e 25 January 2025), driven primarily by a decline in sales of butter spreads (-7.3%). Block butter, however, continued to see volume increases of 7.0%. Plant-based spread volumes also continued to increase (+7.7%), potentially driven by lower average prices.

Cow's yoghurt, yoghurt drinks and fromage frais volumes continue to grow (+6.2%), with spend increasing by 7.7% (NIQ, 52 w/e 25 January 2025). All products saw volume growth during the period, with the exception of fromage frais. Cow's standard plain yoghurt saw the fastest growth of 21.9% year-on-year, while cow's healthy yoghurts saw the greatest actual growth with a 16.0% increase year-on-year.

Cow's cream volumes grew by 1.9% year-on-year, primarily driven by increased frequency of purchase and increased in volume per shop (NIQ, 52 w/e 25 January 2025). Double and sour cream experienced volume growth.

See the full data and these insights visualised on AHDB's GB household dairy purchases retail dashboard.

Time to start thinking about your Cream Awards entry

Put yourself forward, or nominate someone you know. www.creamawards.UK
Look out for the awards brochure in your March British Dairying and posts on social media.

UK - NFU25: Building a resilient dairy sector

The enormous potential of the dairy sector to thrive despite the headwinds it faced offered a running theme of positivity at the 'Building a sustainable, profitable and resilient dairy sector' panel discussion on the NFU Conference fringe.

Chaired by British Dairying Editor and journalist Olivia Cooper, the panel of NFU Dairy Board Chair Paul Tompkins, Dairy Board Appointee Amy Hayes and National Dairy Board Vice chair Ian Harvey offered a wide-ranging examination of the industry, focusing on four main themes.

The panel began by confronting the 'elephant in the room' - the government's Inheritance Tax proposals which have created so much anger and turmoil across the industry. Amy, a fifth-generation farmer, highlighted the potential impact they would have on the future of traditional family farms, and Ian worried about the effect upon tenancies, saying that larger landowners could be forced to sell off tenanted farms to meet their obligations, which could result in multi-generational livelihoods being lost.

He added that farmers trying to save their farms could decide that cows were the easiest asset to sell, forcing some to leave the dairy sector altogether, and spoke for all when he stated: "The knock-on effect has been grossly underestimated."

Commenting on the enormous amount of work that the NFU has done on the issue, NFU Dairy Board Chair Paul Tompkins said: "The breadth of work that we have to get involved in is enormous. The only way we can challenge those, the only way we can influence other people is if we are united and farmers have to be united and there is no better way, there is no better format, there is no better organisation that can do that than the National Farmers' Union."

He went on to say that we would continue campaigning in a coherent and proactive sensible way. But he stressed the board was also concentrating upon other pressing issues, and driving forward the dairy board priority workstreams. "While inheritance tax is taking up a lot of our emotional capabilities at the moment, from a Defra perspective, it's taking up a very small amount of their bandwidth and I need to be equally focussed on all of the other things that they are touching on."

Dairy had made great strides in improving its carbon footprint through productivity gains, he added, but tight margins meant that farmers could not shoulder the burden of future investment alone, a point the NFU would continue to drive home. The organic sector was specifically highlighted as an important part of the sector's sustainability journey. Read more:

www.nfuonline.com/updates-and-information/nfu25-dairy-fringe-building-a-sustainable-profitable-and-resilient-dairy-sector/

UK - Welsh Government approves Bluetongue vaccines licence for voluntary use

Welsh Ministers have agreed to licence three Bluetongue (BTV-3) vaccines for emergency use across Wales. An online general licence will be available for vaccine use in Wales from 1st March. The vaccines will be available on prescription and sold from veterinary practices and can be administered by livestock keepers themselves, following appropriate guidance.

This decision follows the continued spread of Bluetongue virus (BTV-3) cases in England since August 2024. On 4 September 2024, three unauthorised BTV-3 vaccines received Defra Secretary of State permission for emergency use in the UK. The vaccines were licenced for use in England last year and Welsh Ministers' decision to grant a licence means they can now be used in Wales.

Chief Veterinary Officer for Wales, Dr Richard Irvine, said: "Wales remains free of BTV-3, but it is important to be prepared. Vaccines give Welsh farmers an important tool to reduce any impact of this disease in their herds and flocks. I would encourage farmers considering vaccination to consult their veterinary surgeon to discuss whether vaccination is appropriate for their livestock."

UK - Economic and environmental benefits from protected urea

Farmers in England are reminded of the spreading restrictions on urea fertilisers beyond 1 April 2025 and applying protected urea, instead of untreated urea or ammonium nitrate, will offer both environmental and economic advantages.

The rules, introduced in April 2024 and audited through the Red Tractor assurance scheme, aim to reduce ammonia emissions from urea by restricting its application window. Only urea fertiliser treated with a urease inhibitor can be spread beyond 1st April. Even though farmers may see this as greater restrictions, applying a protected urea can offer further benefits that offset the burden of compliance.

Protected urea may cost on average 10% more than unprotected urea, but it is proven to significantly lower ammonia losses by upwards of 70% in comparison. DEFRA's NT26 research project showed an average loss of nitrogen as ammonia from unprotected urea at 22% for arable crops and 27% for grassland. By reducing these ammonia losses by 70% or more, there is a positive economic return on the cost of protected urea of 2:1 on arable crops at today's prices.

Multiple trials have shown protected urea offers equivalent yields to ammonium nitrate (AN) and has a lower cost per unit of N, so users can spread the same amount of nitrogen with less bags and refills. Using protected urea means more of the fertiliser applied remains available to plant, rather than being lost to the environment. Tom Wells, Nutrition Agronomist at Origin Soil Nutrition, says it offers a viable option for several reasons.

"Unprotected urea can be considered an agronomic and economic substitute for AN, with trials showing that protected urea consistently matches AN's yield responses and has the potential to be cheaper per unit cost of nitrogen due to a higher N content in each bag. Furthermore, Origin's OEN protected urea can be blended with phosphates, without deterioration, and farmers have the option to use this in NPK blends. It also doesn't have the regulatory storage challenges of AN."
OriginFertilisers

UK - Highlighting the benefit of British red meat, dairy and cereals during Ramadan

During Ramadan (Friday 28 February to Sunday 30 March), British Muslim TV, in conjunction with Shazan Food Ltd., will release a special 30-day digital series on social media titled British Ramadan showing the preparation and tasting of recipes featuring British lamb, beef, dairy and cereals.

Across the series, we will be demonstrating a variety of recipes as well as highlighting our successful marketing campaign Lets Eat Balanced, promoting the use of British lean red meat and dairy as part of a healthy, balanced meal when Muslims break their fast during Ramadan.

Denise Spencer-Walker, AHDB's Food Communications Manager, said:

"It was great to be invited to showcase some delicious, healthy, sustainable and halal compliant recipes to a Muslim audience during such an important time in their calendar.

"When Muslim's break their fast they need to ensure they eat a balance of starchy foods including wholegrains, fruit and vegetables, dairy and protein-rich foods - so lamb is very popular during that time. I demonstrated six lamb recipes that are easy to cook, highly nutritious and championing meat from Britain.

"Along with lamb, I also demonstrated six beef, three wholegrain cereals and one dairy recipe that are nutritionally balanced and high energy to help prepare for the next period of fasting."