UK dairy overheads among Europes lowest

By Philip Clarke, Europe editor

BRITISH dairy farms have among the lowest overheads in Europe, according to research by the European Dairy Farmers group.

The survey, conducted among the groups 220 members, reveals wide differences in the average level of investment needed to accommodate one extra cow.

In Holland, the cost comes to just over 34,000/cow (21,000), while in the UK the figure is nearer 13,000/cow (8000).

Of the eight member states covered, only Sweden and Ireland have lower charges.

Land and quota values account for the bulk of the differences. The cost of providing enough land for one more cow in Italy is almost three times that in the UK.

The lowest land charge is in the former East Germany, where ground is still cheap and stocking densities are low at 1.1 cows/ha.

On the quota front, Holland eclipses all the other member states, with farmers paying 14,665/cow (9090) for the right to produce milk. The UK now has the lowest quota cost.

The differences in building, machinery and replacement cattle costs are less marked, though Ireland in particular scores well for its simple and economical housing strategy and low degree of mechanisation.

The key lesson from the research, says Alan Hopps of Greenmount College, Northern Ireland, is that milk price isnt everything.

“Overhead values tend to reflect profitability. The milk price in the UK is the lowest in Europe, but quota is also much cheaper, making it easier for people to expand.”

The study also points towards possible future migrations of milk producers from countries where further expansion is becoming prohibitively expensive.