Herd management is the most important factor to dairy margins, new research revealed at the Livestock event has found.

Dairy manager costings from Kingshay show a 5.5p/litre difference between the top and bottom 25% ranked by margin over purchased feed (MOPF). This is equivalent to £55,000 for a herd producing 1m litres a year.

The figures show the dairy system chosen or where the farm is based in the UK have a much smaller impact than how well the herd is managed.

“When we look at the ranking by MOPF in more detail, we see the top 25% herds secure 1.8p/litre more for their milk, mostly resulting from higher volumes and negotiating better contracts, although their milk quality is better too,” said Kingshay’s Richard Simpson.

Feed use efficiency, including getting more from forage, was also a common factor in the best performing farms, he said. The impact of the weather on feed prices has highlighted this, he added.

“Since March 2012, the gap between the top and bottom 25% has widened from 4.9p/litre, with the top 25% down 0.35p/litre and bottom down 0.95p/litre in the current year, with those using more purchased feed harder hit by rising feed prices,” said Mr Simpson.

Feed was not the only cost to take into account but it was the biggest, he said.

Results from Kingshay’s Health Manager service also show the difference between the best and worst performing herds can be worth 1.6p/litre in fertility costs and 2.3p/litre in health costs.

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