Dairy benchmarking report

[farmerdan7618]

It would normally be The Dairy Show today, where I would be on the Old Mill Accountants stand distributing copies of the annual Milk Cost of Production Report, which has come up in threads on here previously.
Sadly there is no Dairy Show this year, but the report can be downloaded from www.om.uk/dairy for those who are interested.
If there are any questions that anyone has, feel free to post on here and I will answer them. There is also a Webinar on Monday 12 October at midday where I will be running through the report and answering questions, for those of you interested, you can register to join here.

 

[Horn&corn]

Interesting report dan. Tricky to read on phone screen but understandable. Amazing how cost control still Appears to make by far the biggest difference regardless of system. Do you think this is peoples skills or other factors?

 

[farmerdan7618]

Interesting report dan. Tricky to read on phone screen but understandable. Amazing how cost control still Appears to make by far the biggest difference regardless of system. Do you think this is peoples skills or other factors?

A mix of needs, desires and skills in my view.

Some desire to make money from milking, and are often the top performers. Their yields from forage will be high, and hence feed costs low. They will consider every job that is done on the farm and how it can be done more efficiently - how to get cows to the feed rather than feed to the cows, whether to run a full line up of kit or to heavily use contractors, and make investments in infrastructure where it will give a return.
These will make money whether they need to or not, but generally have the skills to step back from small details and look at the big picture.

Some need to make money to live and repay finance, but the primary desire may not be making money. These mostly have moderate returns, and may look at smaller things in more detail to make what they desire stack up. Do they need a new tractor? Maybe not, but one can be had at a good price and they would like one and a few k off the cost with a trade in that may or may not break down is affordable. Or those who desire to be ever larger, so take on marginal ground all over the place, some off lying ground doesn't make much.
These tend to make enough to get by, and may well have the skills to make money, but choose other goals. If the skills aren't there, an adviser is usually in place to help them make enough money, but will never be able to get them to the top.

Then there are those who don't need to make money. Some will be sitting on piles of cash from Inheritance, sales of land, member of the family with an outside job or other sources. If they don't desire to make money, they are unlikely to. These will follow whatever their goals are, could be to leave the farm to the children, to have a herd to cows that are nice to look at, to continue a trade that has been in the family for generations. These will do what they want, whether it makes money or not, and often not really worry about profit. They may have the business skills and choose not to use them, or may not have them. Generally would use an adviser who is thought of as a friend if at all, but they won't be briefed to make maximum profits.

 

[jimred]

Where does the cost of herd replacement fit into the calculations?

 

[farmerdan7618]

Where does the cost of herd replacement fit into the calculations?

Non milk income includes livestock sales less purchases to cover a flying herd.
For those rearing replacements all cost categories include the youngstock costs e.g. feed includes milk powder and calf cake.
For those using contract rearing, this is either included within feed, contracting or a mixture of both depending on the agreement.