Look what happened the last time average UK milk prices increased by 15% in 2014, milk production had dropped 3.5% in 2013.  Milk production has then increased 5% pa in 2014 and 2015 and price has subsequently fallen 8.6ppl in total between 2017 and 2016. See Table Source AHDB

In 2015, farmers’ reaction to lower milk prices was to increase milk production.  This worked in the short term as production increased on favourable weather and feed quality which compensated for even lower milk prices.  But in 2016, prices kept falling as production levelled out.  It has taken surplus cull cow sales and poorer silage quality and underfeeding cows this summer to drop production significantly and look what’s happened……milk is suddenly in short supply and milk prices are increasing.

So how can you make sufficient profits on higher milk prices without producing more milk?
Here below is an example of one of our clients who dropped production by 100,000 Litres and made £100k more profit whilst maintaining yield per cow!!!

In this example costs were cut though they look similar on a ppl basis, there was considerable cost inflation in agriculture between 2010 and 2015 as milk prices rose significantly.

Contact Gerard at gerardfinnan@fcgagric.com or your local FCG office to see how we can help you increase your profits but not at the expense of long term milk price.