From dairy farmers’ costs of production data to March 2017, in the Wessex area, the attached graph compares costs of production per kg of milk solids vs profit per cow.

£3.50/kg milk solids output is equivalent to 26 ppl cost at standard litre.  Again, these costs are comparable for all farms, excluding rent and finance and BPS, but including a cost for unpaid family labour.

Here the line of best fit in the graph, automatically generated, indicates that there is a 55% chance of increasing profit per cow if you lower costs per litre or per kg milk solids output.  Much better odds than increasing yield per cow (31% vs 0.4% on the cow yields profit article and I haven’t got the numbers mixed up or the decimal place in the wrong place!).

This is a much safer course of action than focusing on cow yields.  We have a lot of customers who have more profitable and sustainable businesses today across different systems and cow yields, because of their focus on cost reduction per unit output.  It is not about reducing costs irrespective of output.

Here is the financial evidence.  Where does your business fit on this graph and have you a plan of action to move it into the top left corner (reducing costs and increasing profits)?

If you don’t know where your business is in relation to your peers, you cannot get it to where you want to be.  We, as consultants, can help with establishing where you are and helping you put in place a low risk physical and financial plan to achieve your aims.  Our local knowledge and experience is backed up by hard facts in helping dairy farmers successfully improve their dairy farm businesses in the past 30 years.

For more information, please contact your local FCG office or contact Gerard Finnan at gerardfinnan@fcgagric.com