Early indications suggest March 2022 milk supply will be back on the same month in 2021.

Some of the processors are seeing a drop of 4% to 5% year on year. The exact detail will emerge in the coming days, as the month-end comes into vision.

We have to be careful on milk supply in an Irish context at this time of the year, as when early calving cows are in and out in terms of grazing, there can be significant swings that might lead you in the wrong direction.

A lot of small issues such as feed quality, holding calves on farm longer, wet weather, silage in and out, feed in and out and also less nitrogen spread will impact on supply.

Milk drop

Collectively, if all these have a small impact, it can turn into a real milk drop on a national scale.

Given the cost of purchased dairy feed and fertiliser, the signal to the farmer is to reduce stocking rate appropriate to the feed the farm can grow.

The Irish context is in complete contrast to the US where the supply pattern is much more measured and stable

The Irish context is in complete contrast to the US, where the supply pattern is much more measured and stable.

The latest US stats - remember, the US are big players (100bn litres or 10 times Ireland's volume) - show US supply took a drop in January and that continued into February (USDA figures).

Milk production in the United States was 7.5 billion tonnes in December, a decrease of 0.7% compared with the same month one year earlier.

In January, it was 8.6 billion tonnes, again down on the year previous by 1.7%. High feed costs obviously outweighing the rising milk price.

In February, at 7.945 billion tonnes, it was down 1% on the year previous. However, it's not all feed-related, as cow numbers in the top 24 states are also down relative to the same month last year - 8.95m in 2021 v 8.87 in 2022 (ClAL.it).

US milk price

Similar to Ireland and Europe, the milk price in the United States is taking big steps upwards. The milk price (class 3) is now almost $24/cwt compared with the last five years of around $17/cwt.

Nitrogen, or more specifically a reducing nitrogen input, won’t impact as quick in the US as many of the large-scale US dairy farms will have two years feed for confinement cows in stock.

It will be interesting to see how milk supplies pan out in Ireland and other European countries in the coming months.