Our annual joint FCG and Old Mill Accountants Cost of Production report is now available at  https://bit.ly/2oiYAqH or you can request a copy from the office on

Tel: 01935 850093.

The forecast figures for 2019-20 are showing a profit, which is expected to increase by 35% or 1.0ppl to 3.69ppl based on the following assumptions:

As part of this report on actual Wessex Region dairy farmers data analysed, we also forecast current year profits to March 2020 for the same dataset of farmers.  Milk production costs are budgeted to decrease by 10% for the current year and will compensate for a 6% decrease in output costs (mostly milk price), resulting in a forecast increase in dairy profits which is needed.

This still leaves only £81,000 for this 2.1 million litre average dairy farm analysed to cover rent, debt finance and repayment and taxation on a 30ppl milk price!  How are those on 27ppl coping this year?   Most of the profit budgeted is wiped out at this price if your costs are similar to the average farm.

Now in the month of October you should have enough information about your dairy business in terms of costs, calving pattern and forage quality and stocks to be able to budget accurately where your business will be financially at the 31st March 2020.  We budgeted for this sample size this time last year and budgeted profit was under forecast by 0.22ppl or £4,620 on 2.1m litres.   Budgeting is not a precise science, but you get better at it with practice.  The best farmers all budget.

Where will your annual costs of production be in seven months’ time?   Will they be low enough to cope with a milk price of 27ppl?  If you know the answer now, you can do something about it.  Finding out in January 2021 when you get your tax accounts back is running your business blindfolded!

Contact Gerard at gerardfinnan@fcgagric.com or your local FCG Office today, to help you make better use of management accounts information you probably already have, to make more informed decisions about your business.