An online milk price calculator has been developed by AHDB Dairy to help farmers see if they could get a better price for their milk from their current contract.
The tool allows dairy farmers to input the specific details of their milk, in terms of delivery profile and quality, and check if there is potential to increase the income available.
With milk prices at their lowest level for six years and the opportunities to switch milk buyer almost non-existent, it was important dairy farmers were able to maximise what they get for their milk, said the levy organisation.
“Some may be able to achieve a higher price for their milk by better matching what is in the bulk tank to what buyers pay the most for. The complexities of milk contracts can make this a daunting task.
“Its value lies in providing a quick and easy way to answer the ‘what if’ questions, such as ‘how would my milk price change if I managed to reduce my somatic cell counts or increase my butterfat?’
“By entering the before and after farm data into the calculator, farmers will be able to get two sets of outputs, allowing them to compare the differences and clearly see how changes impact their milk price.”
AHDB has produced a video and guidance notes explaining how the milk price calculator should be used.
Farmers can compare differences based on an AHDB Dairy standard litre or import their own data into the tool.
After importing their own farm’s data, they can then change different parameters, such as butterfat, to see if buffer feeding to increase the butterfat percentage by a few points might be worthwhile.
The system includes information on aligned liquid milk contracts, standard liquid contracts, standard manufacturing contracts and A&B contracts, from buyers such as Arla, Muller, Dairy Crest, Lactalis, Meadow Foods and Graham’s Dairy.
However, contracts offered by some other buyers, for example First Milk, are not included as the information is supplied to AHDB on a voluntary basis.
Watch the video: