Higher yielding dairy units produce lower profits

Intensive dairy units can cost more per litre to run than simpler systems, according to figures from Deloitte’s annual farm income survey.

Though Deloitte’s findings were only indicative, warned consultant Mark Hill, they showed the folly of intensive dairying.

The survey compared three different dairy farmer clients on different production systems.

The dairy farmer getting 6000 litres of milk from each cow’s lactation booked costs of 15p/litre.

However, an 8000-litre a cow producer saw costs per litre rise to about 16.5p, while for a 10,000-litre system, they climbed to 19.5p/litre.

In the third case – a 900 cow unit – extra forage and labour were the main drivers of higher costs, as well as faster herd depreciation.

 “Three times a day milking is a mugs game with the milk price where it is,” said Mr Hill.

He also urged dairymen not to omit anything when working out their cost per litre.

“Those that do have done some damage to the industry by letting the supermarkets get hold of unrealistically low estimates.”

Across the survey, Deloitte found dairy costs ranged from 15-20p/litre, while milk prices varied by the same amount.