Dairy margins start to improve

Higher milk prices have started to filter through to dairy producers’ margins, according to the latest results from Promar Milkminder.

In February, dairy farmers’ average margins over purchased feed increased to 18.92p/litre – up from 18.51p/litre in January and 1.38p/litre above the same time last year. Milk prices averaged 26.58p/litre, compared with 26.02p/litre in January and 24.72p/litre last year.

However, feed costs have also risen, up by 1% on the month and 7% on the year, to 7.66p/litre. Farmers are making more milk from forage, averaging 7.1 litres a cow a day, compared with 5.1 litres in February 2010. Milk yields are also higher, at 26.4 litres a cow a day, 0.1 litres up on the month and 1 litre higher, year-on-year.

The top 20% of producers averaged a margin over purchased feed of 20.33p/litre, with a milk price of 27.52p/litre and feed costs of 7.19p/litre. They made 8.6 litres of milk from forage, and produced 29.5 litres of milk a cow a day. Herd size was significantly larger, at 220 cows compared with a Promar average of 171.