Trends in Dairy Herd Performance

Over 300 dairy farmers have now completed their Greenmount Dairy benchmark information for the quota year 2004/05. Average milk yield per cow continues to increase by about 200 litres per cow per year as can be seen from Table 1. Milk yield per cow has increased by 412 litres with an increase in meal fed of 60 kg/cow since 02/03. Milk from forage had fallen by approximately 700 litres per cow during the difficult weather conditions of 2002/03 but has only recovered by 279 litres per cow despite much better weather conditions.

Table 1. Greenmount Dairy Benchmarked Farm Performance for last three years

Compared to 2003/04, total output in pence per litre has fallen by 0.61 pence/litre in 2004/05 (3.4 percent). This is a combination of lower average milk price (18.45 to 18.30 ppl), lower calf output (1.29 to 1.10 ppl) and higher replacement costs (1.38 to 1.65 ppl).

Variable costs are slightly lower than the previous year mainly due to lower milk quota leasing costs, while overhead costs are similar in both years. Variable costs make up 55 percent of total costs. The largest portion of variable costs is concentrates which account for 61percent of all variable costs and 34 percent of total costs. Machinery and depreciation costs continue to represent the largest proportion of overhead costs at 51 percent.  This percent needs changed if it is for total overheads.

A significant number of farms have now been recorded each year for the past 6 years. Examination of 72 of these common farms, illustrates the development on benchmarked farm since 1999/2000. On average these farms have expanded from 84 cows to 107 cows, increased milk yield per cow from 6128 litres to 7030 litres per cow and total milk output per farm from 519,000 litres to 754,000 litres. This means an increase in output per farm of 45 percent, which has been necessary as milk price is similar to six years ago at 18.37 pence per litre and costs have increased significantly in the meantime. Meal input has increased from 1230 kg/cow to 1750 kg/cow during this same period.

Larger dairy herds tend to have higher yields per cow and output per labour unit is also higher. This will make these farm businesses more sustainable in the longer term.

Analysis of 2004/05 results demonstrates that the highest profit per cow and per litre was on farms with milk yields between 8000 and 9000 litres per cow (average 8438 litres) feeding 2537 kg/cow of concentrate with 2801 litres from forage. Herds using maize or wholecrop recorded approximately 14 percent and 10 percent higher yields per cow respectively than those not using these forages, however net profit per cow was similar for all three systems. In 2004/05 45 percent used TMR and 53 percent used an easy feeding system. TMR fed herds produced an extra 605 litres per cow but ended up with similar net profit per cow before family labour costs. High yields (>8000 litres) can be achieved without feeder wagons although a mid day feed may be needed to ensure cow health. Higher yields and cow numbers are necessary to exploit the full potential of TMR feeding.

Within the quota regime of the past 20 years the focus has been on reducing costs per litre of quota to maximise the profit on each litre produced. Producing more litres was also important to spread the cost of overheads. As quota purchase or leasing costs will be lower in future years farmers should focus more on profit per cow. When the top 25 percent of farms on a profit per cow basis are examined it can be seen that they have:

Future development however is likely to see continued expansion on individual farms. This can only take place in a sustainable way by careful planning of housing, slurry requirements, forage and feeding management. Detailed financial monitoring and budgeting must underpin all of this and benchmarking is the essential starting point for this development.