Future dairy farmers need to know cost of production and knowledge of the market

Mike King, chairman of the Royal Association of British Dairy Farmers (RABDF), has said the modern dairy farmer must know the cost of production on a rolling basis and understand the changing market.

He said that moving forward dairy farmers needed to know these two key factors, and if they didn’t tally, in order to better plan for a future in agriculture.

“Dairy farming businesses will have to survive at 21 pence per litre (ppl) to 25 ppl farmgate milk prices for the next five years since there is no appreciable change in sight to future market trends,” he said.

“Consequently producers are going to have to focus, and once and for all know how much it costs to produce one litre of milk.

“Calculations must be made on a month by month basis, not a one off, in order to respond to market conditions and build resilience in to the business.

“If these figures don’t stack up, then farmers should seriously consider, should I stay or should I go.”

Mike King speaks from experience as the co-owner of a 550 cow pedigree Holstein herd in Gloucestershire.

He said: “We are regularly reviewing our business’s cost of production and making decisions accordingly.

“For example, this season we are saving in excess of 1 ppl from our cost of production by introducing zero grazing from March to October.”

Meanwhile National Milk Records (NMR) director, Jonathan Davies said: “Measuring and monitoring every component of a dairy farming business is absolutely essential for all producers going forward if they are to make fully informed management decisions.

“Quite simply, if you don’t measure you can’t manage and that’s not just milk yield and quality but also health, fertility and disease status monitoring.”

Posted in ARA News.