Advice for reducing winter dairy costs

While there are steps producers can take to reduce winter productions, processors must play a role too, says Tony Evans, head of business consultancy The Andersons Centre.

For those dairy farmers who house cows 365 days a year, it is likely their winter management strategy varies little from the summer, aside from saving on lighting costs and higher total feed intakes due to a lower ambient temperature, which results in a higher maintenance costs per cow.

But for those producers who are used to keeping cows at grass, the onset of winter housing can represent an almost 300% increase in costs, from 90p a day to 260p a day a cow, for example. On a 200-cow herd over 160 days this equates to another £54,400.

See also: How to make the most of your milk cheque

These extra costs include silage, concentrates, bedding, scraping, feeding and slurry carting back to the paddock.

Dairy farming in the winter not only has greater financial costs, but also significantly greater demands on the people and capital employed in the business. When one includes the cost of labour, harvesting the milk and cost of herd replacement at almost 9p/litre, this means the minimum costs of winter milk production is 26p/litre.

This poses two main questions:

  1. Why do seasonality payments with most milk buyers cease in October/November? It costs as much to produce milk in December/January/February/March.
  2. Why bother to produce milk for manufacturing in the winter?

Neither of these are sustainable in our dairy industry without either a price rise or a change in attitude by the milk processor.

In the meantime, however, there are steps milk producers can take to minimise winter costs.

  1. Reduce the length of housing by grazing grass in the autumn and having adequate field access (quality tracks) and by grazing grass again earlier in the spring.A week added outdoors at each end of the summer and spring on a 200-cow herd will save £4,760 (saving of £1.70 x 200 cows x 14 days).
  2. If you have to house – how about using self-feed silage? This could reduce the 200 cow herd winter cost by £12,800 (based on machinery costs of £40/hour running for two hours a day over a 160-day housing period).
  3. Dry cows and heifers on some suitable land areas could be out-wintered on conserved grass and/or forage crops, saving £5,540 (based on 54 dry cows outwintered for 60 days, saving £1.70/day).

These combined savings are £23,100, compared with a full winter housing strategy of £54,400 – this represents a 42% saving or the equivalent of 1.9p/litre.

An alternative option for a large proportion of UK-manufactured milk produced is for processors to manufacture vigorously in the spring/summer/autumn and process little or no volumes in the winter.

Elsewhere in the world – notably Ireland and New Zealand– they produce powder, butter and cheese in this way, and while the farmer may receive a lower return per litre for milk supplied, it will ensure UK-manufactured products can compete long term in the UK markets and allow a robust dairy industry to thrive, not just survive.

Equally, for those processors who need milk all year round, they could increase their winter milk price paid by reducing the summertime payment. If this does not happen there will always be a tendency to encourage more and more spring profile milk and for what is a relatively level supply demand for the liquid sector.

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