Compare to improve
Compare to improve
IMPROVE profits by comparing farm profit with others and aiming to retain a greater proportion of milk income through better use of grazed grass.
That was the message from the British Grassland Society. Past president Jerry Rider explained that comparable farm profit was a sensible replacement for margins. "This is a method of comparing profit and financial efficiency between dairy farms. It is calculated from management or ordinary farm accounts, and is the difference between income and total expenses."
Under the system producers calculate cost a litre, allowing an item cost comparison (see table).
"Producers attending grazing discussion groups appear quite relaxed about sharing these figures with other like-minded people in the group. It is apparent that no one is best at everything, and usually everyone is better at one item. The interest and value lies in finding out why some peoples costs are lower, and discussing with the group what to do about it," said Mr Rider.
"The costs show that purchased feed, forage, labour and machinery costs are low on farms making increased use of grazed grass. That is due to reduced reliance on silage and less slurry as cows are housed for shorter periods of time.
"The idea of grazing – and of comparable farm profit – is to help retain more income from milk. By using more grazed grass we are keeping 41% of output on-farm before rent, finance and quota."
Mr Rider had also compared this with average figures produced by consultants at the event.
"The figures put forward by consultants retain only 17%, or 3.66p/litre on-farm, whereas graziers retain about 9.5p/litre." *
Grazing cost comparison
p/litre %
Purchased feed 1.8 8
Forage 1.5 7
Vet/AI/misc costs 1.5 6
Labour 4 18
Power/machinery 2 9
Depreciation/
property/sundries 2.3 11
Total 13.1 59
Comparable profit* 9.5 41
*Excludes rent, finance, quota leasing.