It could be easily forgotten that towards the close of 2021 input costs such as the three ‘F’s’; feed, fuel and fertiliser, were already creeping up in price. However, the Russian war on Ukraine acted as a catalyst for the explosive increase in costs and the start of the rapid increase in milk prices offered by processors seen in 2022, with AHDB reporting a massive 52.9% increase in all GB milk between November 2021 and November 2022.
Processors caught on to the severe increases in milk production costs and quickly acted to increase the price paid for milk to support and sustain yields, however, last summer's drought resulted in farmers struggling to reach 2021 levels.
Production increased 2.5% over September and November compared with 2021 levels and are unlikely to see the usual winter dip in milk production. This is likely to be problematic as the spring flush will also soon hit, delivering the usual seasonal glut of milk onto the market.