15 September 1995

FACE COST CONTROL CHALLENGE

There was a time, not so long ago, when securing a milk price comparable with the rest of Europe was a key concern.

The new milk market has given UK producers that higher price – and added an extra 20% to most milk cheques. Margins from milk are healthy and quota restraints on production should maintain a ready market.

That said, securing the license to produce milk is expensive and any decision to lease or buy quota should be costed carefully.

However weighty this issue, it must not be allowed to cloud other critical decisions on which the future efficiency of dairy farming depends. General cost control and correcting lost profit opportunities are equally important.

Granted investment may be needed to bring the average dairy unit up to date to control pollution and produce milk to tighter quality standards.

But spending must not be at the expense of cost control. Most businesses offer scope for reducing fixed costs. The challenge on many units is to find the time to scrutinise overheads closely.

Less easy to monitor, but equally as important, is the cost of "profits not made" – be it through poor fertility, lameness, disease, or poor hygiene. Infertility, for example, costs the UK industry £500m a year – with estimates that each day over the ideal calving interval could be losing the business £3 a cow.

If you are looking for information and advice to enhance profit through improved management and efficiency, be sure to visit next weeks European Dairy Farming Event, to be staged on September 20 and 21 at the National Agricultural Centre, Stoneleigh, Warwickshire.

The show is a sell-out and the organiser, the Royal Association of British Dairy Farmers deserves credit for its efforts to make this the best event yet in the UK dairying calender and on the NAC site. The Dairy Event deserves support from all those whose present and future prosperity depend on dairying.

In this supplement, we preview the Event and detail how best to keep a tight reign on costs. One Herefordshire producer explains how the high cost of quota has forced a change in farming policy. We also try to determine what quota is really worth – and offer a wealth of other management advice to draw on.

Those farms that follow the routes suggested can look forward to even greater profits as they improve their competitive standing in the UK and Europe.

Stretching forage supplies this winter could mean feeding youngstock a straw-based ration. For those considering this route – and for other winter feed advice – the new Feeding Forum at the Event will be worth a visit (p20).