Does Milk production pay?

[Thick Farmer]

There seem to be two groups of dairy farmers at the moment:

Those that want to expand as they are making a good profit and those that want to cease production as they are making a loss.

How can there be such huge differences in both attitude to the job and profit margiin?

 

[Dragon]

One thing to consider might be the 5-6-7ppl difference in milk price between what producers receive

 

[outofthefryingpan]

Good question!

I have been wondering this! I had been thinking if it was something to do with the types of systems that people run - block vrs all year round calving ect but then quite a few all year round chaps around here are chucking up building and throwing around concrete like its going out of fashion so I guess it can't be that!!

 

[outofthefryingpan]

One thing to consider might be the 5-6-7ppl difference in milk price between what producers receive

Is there that much of a difference??!!

 

[Dragon]

maybe for sum with a sizeable mortgage / overdraft are ok with spending this years profits adding on 10-15% cows each year, with the aim of reduceing the finance cost per cow and overall COP for the following year. Its and big merry go round

 

[Thick Farmer]

What's the average profit margin per cow or per litre then?

 

[Dragon]

Is there that much of a difference??!!

If producer are receiving 25-26ppl then yes, but producers will cut there cloth according to how much there paid so this might not be the total difference in ppl profit

 

[Dragon]

no body seems to sing from the same hym sheet when talking profit. really depends what included. Dairy co have produced there current milkbench report.

 

[Thick Farmer]

I'm talking about money left after all costs have been accounted for.

That is what I term as profit...

 

[Walterp]

I suspect you'll find that most dairy farmers don't think in terms of profit as in a cash surplus. They are more inclined to view progress as increase in net worth, or even in turnover whilst maintaining the same margin per litre.

These may be the hallmarks of an industry in rapid expansion and consolidation in fewer and fewer hands, also known as Last Man Standing....

But the answer to the OP is that milk production is profitable, just like sex is dirty, so long as you do it right...

 

[Derrick Hughes]

After I saw that link On here regarding the James gang spending 3 mil on 300 cows the answer surly must be a big yes , or did they rob a bank

 

[multi power]

as my granny used to say milk is a goldmine

 

[Princess Pooper]

One thing to consider might be the 5-6-7ppl difference in milk price between what producers receive

True - but there are also good and bad dairy farmers whose costs of production are vastly different, also some areas of the country where there are more options for contracts and better grass growing so it can be done cheaper.

 

[Blue.]

Where's Lazy Farmer

 

[z.man]

dont think it pays that well but it seems to be better than whatever they decide to try if they give up milking

 

[Walterp]

'Y Tir' the FUW newsletter reports that the profit figures range from 11ppl to zero, depending upon your ability.....

 

[mf7480]

I'm talking about money left after all costs have been accounted for.

That is what I term as profit...

That would be nett cash flow, not profit. For example our nett cash flow is under half the profit we get taxed on.

But yes, I see where you are coming from. I always look at nett cash flow as my 'profit' so to speak.

 

[Penmoel]

'Y Tir' the FUW newsletter reports that the profit figures range from 11ppl to zero, depending upon your ability.....

Are they the figures our minister Alun DAvies used to underline that some dairy farmers need to get a grip on their businesses?

 

[lady muck]

Are they the figures our minister Alun DAvies used to underline that some dairy farmers need to get a grip on their businesses?

Perhaps he should try milking cows for an 8 month winter, whilst having had 3 weeks summer grazing, spiralling feed costs and now no spring and the prospect of the milk price being cut!! We are technically efficient but I guess too highly borrowed.

 

[Penmoel]

Perhaps he should try milking cows for an 8 month winter, whilst having had 3 weeks summer grazing, spiralling feed costs and now no spring and the prospect of the milk price being cut!! We are technically efficient but I guess too highly borrowed.

As far as I am concerned you can gladly have him!