When does it become un-economic to chase litres? This is a question that I am hearing a lot when I am on farm at the moment. There is a simple answer to this – when the cost of feed to produce an extra litre exceeds the value of that litre then we have run into a problem. Before we get to this tipping point, the way you are measuring this would dictate the answer to the question.
If we look at margin over purchase feed (which I know some of you will be looking at and saying isn’t relevant. I will come on to this…) there are 3 measures we can look at here per litre, per cow and per hectare the problem is each of these will give you a different answer to your question. This is easier to see in the table below.
Annual Results year end March 15 (Ranked by purchase feed costs).
Source: Kingshay Dairy Costings Focus 2015
As we can see from the table that even though on a litre basis an increase in feed sees a reduction in margin, the overall effect per cow and per hectare is a positive one. When we are looking at bench marking it is important to measure by the first limiting factor e.g Cows or Land.
As I mentioned earlier MOPF gives us some insight but obviously has its limitations, taking things further and looking at total cost of production is always going to be more useful.
CMC partnership with Kingshay
We are pleased to announce that in partnership with Kingshay we are able to offer subsidised profit manager reports to our customers. These are quarterly reports that detail all income and production cost and will also enable benchmarking to similar herds in similar areas. Please contact me or your own representative for more detail.