22 November 1996


More dairy companies are cutting prices to farmer suppliers. Fat value is being reduced, and payments for protein capped.

For Northern Milk Partnership suppliers, for example, those worst hit will be producing milk with higher proteins.

The hope is that the price drop can be offset by substantial savings in feed costs after changing to a ration designed to produce lower protein milk.

But unfortunately the milk price changes come long before nutritionists know how to maintain profits by adjusting rations.

Many producers claim they can change protein by changing the ration but the process is still unpredictable. And several of the commercial products sold as butterfat % reducers are not economic – even as milk quota savers.

Those keen to avoid super-levy, and all the signs point to yet another record bill, would do better to first calculate their over-quota litres and divide this over-production with number of days left. The aim is to reduce production by this amount. This Dairy Update considers the options available.