Dairy farmers should not only look at the costs on their farms but also the return they get from expenditure. Experience from 2002, when similar milk prices prevailed, demonstrated that those who maintained milk output minimised the impact on dairy herd profitability. In many cases, this was achieved by maintaining concentrate feeding levels. Reducing concentrate levels should not be an automatic reaction to lower prices. This short-term reaction could have long-term effects on milk quality, cow fertility and cow health. Some farmers feel that reducing overall milk output in the UK would improve milk prices. A recent Milk Development Council report clearly stated that this is incorrect.

Dairy farmers should plan ahead now for this winter. Silage quality should be assessed early through silage analysis. Quantity may also need to be considered on some farms. The optimum feed level for concentrates will depend on the price of milk and concentrates, silage quality and the monetary value of silage being fed. Quota leasing costs are now very low and this also influences optimum feeding levels.

The appropriate supplement level with poor quality silage will be largely unaffected by the change in prices. Medium and good quality silage will have slightly lower optimum concentrate levels compared to last year (provided silage quantity is sufficient). The reduction may be of the order of 1 – 2 kilos of meal allowing more forage intake and thus more milk from forage. Each farm situation is different and decisions should be made on an individual basis.

Many dairy farmers are looking closely at the long-term profitability of their businesses. Dairy farmers need to know the total cost of milk production on their own farms. It is likely that the Single Farm Payment will be required to subsidise current production costs on many farms – is this the case on your farm? How will the business cope with potential changes imposed under Nitrate Vulnerable Zone (NVZ) legislation? These questions can only be answered based on sound financial information. Greenmount Dairy Benchmarking provides a reliable basis for decision making on dairy farms. If you have not benchmarked you dairy farm before, this autumn provides a good opportunity to appraise your business. Contact your local Dairy Development Adviser for details.