Good management skills are more important than size of enterprise when it comes to turning a profit on a dairy farm.

Despite the insistence of many consultants that the only way to sustain milk production is to increase herd size, a new study commissioned by Milk Link found a good number of smaller herds easily outperformed larger outfits.

Many more had plenty of scope to improve their performance.

The best farms had higher stocking rates, more efficient use of concentrate feed, lower cost structures and much higher profitability levels.

Martin Turner of Exeter University’s Centre for Rural Research, and principal author of the report, said many studies had identified a bleak future for smaller-scale dairy farming.

“Ours points to the areas which need attention if such units are to survive, and also shows many, well-run, smaller herds can compete with the large units.

“Remarkably, the difference in net profit between the top and bottom quartiles was more than £50,000 per farm, which is extremely encouraging for smaller dairy farmers.”

Mark Brooking, membership director at Milk Link, said the study proved dairy farmers with smaller herds could compete successfully if they demonstrated good technical and business skills.

About 30% of Milk Link members had herds of 80 cows or fewer, and one of the exercise’s aims was to help the company pinpoint any changes to its milk field in terms of production levels and location, he said.

“We believed smaller farms could survive, but we needed evidence to back that up.

This study tells us smaller producers most definitely will be here in the future.”

Milk Link would analyse the findings and pass information onto members, he added.

Key requirements for success included raising skills in dairying, particularly at managerial level; using more sophisticated management tools such as professional advice;

and more effective use of benchmarking, typically in collaboration with other producers.