Why Increase Yields Unless the Excess Is Profitable
UK - Milk prices are on the up, quota is not a huge concern, milk buyers cannot get enough milk to fulfil contracts – surely it makes sense for all dairy farmers to increase yields? Promar national dairy consultant Derek Gardner takes a look at the best options for this autumn.
7 September 2007
1 minute read
After a prolonged period of low milk prices, farmgate prices are starting to increase. The rises so far have been small and slow in coming but more are in the pipeline.
At the same time the decline in cow numbers mean it is unlikely that UK quota will be exceeded, especially after this summer, so it is natural that many will be tempted to try and increase yield per cow.
Increasing yield makes good business sense as it will boost turnover, spread costs and give profits a timely nudge – but there is a proviso.
There is no point increasing yields unless the extra litres are profitable, and in simple terms this comes down to the relationship between milk price, feed cost and how efficiently you can do it.
There is still an enormous range in milk prices received on-farm. Contract prices can differ by as much as 5ppl, and this is mostly out of farmers’ control, being down to the accident of where you farm, and the markets your buyer allocates your milk to.
There is a further 1.5ppl gap between those who can get the best out of any individual milk contract offered, and those who cannot.
