60% of dairy producers unaware of production costs
28/11/06

More than 60% of dairy producers do not know their cost of milk production, whilst those who indicated that they do, quoted an average figure of 17.7ppl, according to the Royal Association of British Dairy Farmers’ annual independent survey conducted at this years’ Dairy Event.

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“This year’s survey of 634 dairy farmers, found that a massive 62% were unaware of their total production costs, a figure 10% higher than the survey at the same event two years ago,” explains RABDF chief executive, Nick Everington. “Furthermore, the trends were even more astonishing considering the fact the average age of the survey participants at 39 years was well below the average age of UK dairy farmers, and their herd size at 193 cows, was twice the national average.”

“Overall, these figures make alarming reading when a recent joint RABDF/NFU survey found that the cost of milk production has increased to around 21ppl, with the average producer price being just 17.3ppl,” he says. “For producers to be able to fully understand their businesses, identify opportunities to make savings and improve overall efficiency, then they must start to measure their production costs and ensure that figure takes in unpaid family labour, which RABDF estimates at approximately 4ppl.”

Despite the overall lack of knowledge on costs, the majority of the survey’s respondents demonstrated dedication to dairying for the short to medium term. As many as 44% indicated they planned to expand their herds during the next five years, while 36% intended to maintain the status quo. Less than 8% planned to quit or retire from the industry, while a further 10% were considering diversifying.

Mr Everington adds: “We commend these producers for their resilience to remaining in the sector during the current climate. Visiting the Dairy Event provided them numerous opportunities to explore the latest advances in genetics, nutrition and management, the majority of which can help them to strengthen their businesses and contribute towards cost savings and improved output.”

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