THE NFU has released detailed evidence this week (w/e Jan 28) to back up its demands that milk prices must rise.

According to the organisation‘s figures, few areas of dairy farmers‘ businesses have escaped cost increases – totalling about 1.7p/litre – over the past two years and more unexpected hikes were likely, said chief dairy adviser Tom Hind.

“Even before the impact of these increases has been taken into account it was estimated that 60% of dairy farmers were failing to cover their own production costs,” said Mr Hind.

Fuel prices increases added 0.1p/litre to farm overheads, while higher energy costs also contributed to higher fertiliser costs, putting 0.25p/litre on to forage variable costs.

Feed costs rose significantly, too, with maize gluten, for example, costing more than 20% extra.

“It is fair to estimate that the increased cost of concentrates has added 0.25p/litre to on-farm costs,” said Mr Hind.

Labour, which represents the largest cost on dairy farms, rose by 14.8% (0.56p/litre) after two inflation-busting pay awards from the Agricultural Wages Board.

Vet, AI, recording and consultancy bills all rose significantly as well.

Extra environmental and single farm payment obligations were also set to add to cost pressures soon, said Mr Hind.

Many milk producers will have to set aside land for the first to claim SFP and the cost of finding replacement land and additional set-aside maintenance, like topping, will add 0.14p/litre to costs, he reckoned.

  • See p19 of the Jan 28 issue of FARMERS WEEKLY for more dairy costings information.

andrew.shirley@rbi.co.uk