Dairy farm numbers have fallen by almost 5% in the past year, according to AHDB’s latest survey of milk buyers.
The dairy reduction has been put down to declining returns, with the milk price having fallen on average 13p per litre in the last year.
High input costs have also contributed and, although these have eased recently, they are still significantly higher than before the Ukraine war.
According to the Scottish Farm Advisory Service milk volumes are now over 3% below this time last year.
Industry analysts suggest prices have reached the bottom and should start to improve in 2024.
The cost of production is around 37p per litre, which is above what many Scottish milk buyers are paying.
The milk-to-feed price ratio calculated by AHDB and Defra, was 1.18, lower than a year ago at 1.39, indicating the value of milk is related to purchased feed costs.
At 1.18, milk production is only stable; if it falls below 1.16, an output reduction is expected.
Elsewhere, the beef trade has seen a festive uplift.
Improved retail demand as the Christmas countdown begins is supporting prime cattle prices, with figures from QMS showing cattle and sheep prices were 25% above the five-year average.
With prime cattle numbers remaining tight, combined with early festive demand from butchers and abattoirs, several auction marts have reported a strong trade with prices having increased.
The export market remains very favourable, with a reduced number of lambs on the Continent and a high European price, making our lamb very competitive.
As we head towards Christmas, with a reported 15% reduction in turkeys this year, it could give a welcome boost to pork, beef, and lamb sales over the festive period.
