UK dairymen score well in Europe-wide comparison of costs
UK dairymen score well in Europe-wide comparison of costs
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 k34,000/cow (£21,000), while in the UK the figure is nearer k13,000/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. Even allowing for the relatively high stocking rate of 2 cows/ha in Holland, the cost of providing enough land for one more cow comes to k13,930 (£8640). That compares with k6490/cow (£4020) in the UK.
The highest land values, however, are found in Italy. "Italian farms in the Po area have to compete with arable farms, which leads to high prices," says Arndt Reil from the Federal Agricultural Res-earch Centre at Braunschweig, Ger-many, who analysed the findings.
Population density is also high in this area and land is seen as a safe investment. Combined with a low stocking rate, land cost/cow comes to over k19,000 (£11,780) in Italy, according to the study.
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 k14,665/cow (£9090) for the right to produce milk. The UK now has the lowest quota cost.
The differences in building, mac-hinery 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.
"We can learn a lot from the Irish," says Alan Hopps of Greenmount College, Northern Ireland. "Average milk yield is about 5500kg/year, something some cattle breeders would laugh at. But it is achieved by using only 1t of concentrate and with very little machinery."
The key lesson from the research, says Mr Hopps, 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."
Lower investment costs in some member states also mean it is easier for new entrants to come into dairying. "There are a number of farmers looking to start up in Northern Ireland, some of whom are selling their suckler cow enterprises to raise the funds."
The study also points towards possible future migrations of milk producers from countries where further expansion is becoming prohibitively expensive.
"The decision to expand or not will depend on the marginal economics of taking on an extra cow," says Mr Hopps. "The farmer will already have the land and equipment in place and will need to look at his variables. But when capacity is reached and he has to make further investments, he may look at costs in other member states." *