30 June 2000

Take double look at dairy costings

REVIEW both costs a cow and a litre when looking at margins over purchased feed to avoid costly pitfalls, warns Kingshay.

Its Dairy Manager costings service shows top 10% margin/cow herds have a £27,000 higher income than top 10% margin/litre herds. But this advantage in margin falls to just £4000/herd after feed, fertiliser, replacements and additional quota costs. Thats before overheads are considered.

"Whichever approach you take, the aim is to produce a high total herd margin," says Kingshays Richard Simpson.

"Both these top 10% groups show impressive results and demonstrate what can be achieved." The margin over feed, fertiliser, replacement and additional quota is £103,000 for top 10% margin/cow herds with an output of 812,000 litres and £99,000 for top margin/litre herds producing 664,000 litres.

Mr Simpson advises monitoring both margins/cow and /litre, and benchmarking against herds using a similar system to your own to identify the most appropriate way forward.