Feed continues to be a key watch point, as feed prices have been running high. This has in turn pushed the milk to feed price ratio (MFPR) into the ‘contraction zone’ for some contract types, meaning that farmers may have to constrain their production.

Although feed prices are high, grass is currently abundant, with a strong recovery after a rocky start to the season. This means plenty for grazing and for making silage, though there are still question marks over the quality of that silage. This could help mitigate the impact of high feed prices over next six months, if the forage quality is good, but if the price situation hasn’t improved by winter we could see that impacting production. That said, rising feed costs were incorporated into our previous forecast, and overall our expectations remain in line with where they were in the spring.