Dairy farmers will need to focus on profitability as opposed to output to ensure maximum returns when the sector continually has to battle high input costs and demand remains weak in the main importing nation of China.
“Level supply, longer housing periods, less reliance on grazed grass and higher cost in terms of labour and power requirements are all legacies of the liquid milk market,” said Mr Haverty.
“Our most profitable clients are those practicing low cost, medium output, grazing-based systems with the yield from forage at less than 4000litres. Other key characteristics include block calving, autumn, spring or both, cross-breeding to enhance milk solids and an absolute focus on cost control.”
However, he added that the company’s Scottish version of Friesian farm,. a 130ha holding in central Scotland with 200+ milking cows, growing some maize, is more positive for the 2023/24 season, albeit dependant on how far milk prices recover, see table.
Figures from the past two decades show that margin from production has not changed much and has been consistently in the 0-3p per litre, with an average of just 1ppl over the entire period.
In conclusion, Mr Haverty said that while milk prices have historically been erratic, the sector has some big challenges to face around sourcing good labour and the requirement for capital investment. There are opportunities to do things differently, thereby lowering production costs in the sector. These include improved forage production, reduced fertiliser and making better use of slurries and manures.
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