Milk Cheque margins drop

01 October 1998

Milk Cheque margins drop

MARGINS achieved by herds in ADASs Milk Cheque system fell sharply in the year ending March 1998, despite a 4.5% increase in average yields to 6647 litres a cow.

The main factor depressing margins was a 15% (3.77ppl) decline in average milk price. Margins over purchased feeds fell by over 3ppl to 17.9p, or by £145 to £1189 a cow.

Production from forage dropped just over 7% to 2669 litres a cow. Concentrate use a litre was unchanged, but average feed rate climbed by 3% to 1725kg a cow. Despite this, average purchased feed bills fell from 12% to £238 a cow.

Milk Cheque manager Ian Powell told a European Dairy Event meeting that the latest figures showed the pain was continuing.

For the first time his report included fully-costed margin over all feed (MOAF) figures, which he described as a more accurate and realistic measure of herd performance.

“Margin over purchased feed does not reflect true costs of production, as home-grown feed is ignored,” said Mr Powell.

“The full opportunity costs of land utilised for the production of home grown feeds has a significant effect on the true cost per tonne of feed, particularly where feed is grown on land eligible for IACS payments.”

The top 10% of herds as measured by MOAF produced average yields of 8249 litres a cow from 148 cows, compared with an average of 6672 litres from 122 cows. And their average MOAF was £1280 a cow, more than a third above the average.

The top 10% of herds were fed more cake, but produced higher yields and a MOPF £320 above the average.

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