A major issue raised by winter-milk producers at a recent event at Johnstown Castle was the winter premiums currently being offered to farmers.
Costs on all dairy farms have risen over the last 18 months to two years, and figures given by Teagasc at the event show that the cost of keeping a winter-milk cow is €2,386.
This equates to a production cost, using the average winter-milk cow producing 5,929L (6,107kg) of milk of 40c/L – which does not include capital repayments, drawings and taxation.
Many of the farmers attending the event vented their frustrations at the current winter-milk premiums that are being offered to producers.
With the increased cost of production now meaning that a lot of, if not all of this premium is being lost to the increased cost.
Winter milk
Speaking at the Johnstown Castle event, John Dunne, Teagasc’s winter milk specialist, outlined the projected cost of production for winter-milk suppliers in 2023.
Dunne said that these costs are for keeping the average winter-milk cow and that there will be great variation between individual farms.
But based on this analysis, the cost of keeping a winter-milk cow has increased by €463, with 49% of this was made up of feed budget costs.
Below is the projected cost of production in 2023, using all quantities of inputs the same as 2022 – with assumptions made around the cost of these inputs.
Cost 2021
(€)Project 2022
(€)Actual 2022
(€)Difference
2021 vs 2022
(€)Projected 2023
(€)Feed 553 852 745 +192 745 Fertiliser 148 369 253 +105 183 Vet 91 100 101 +10 109 AI/breeding 46 51 51 +5 55 Contractor 163 244 182 +19 182 Other variable costs 176 194 196 +20 212 Total variable costs 1,177 1,811 1,528 +351 1,482 Total fixed costs 757 871 869 +112 904 Total costs 1,934 2,682 2,397 +463 2,386
Dunne said the costs are similar to 2022, but that farmgate milk price has seen a considerable fall since last year.
He advised farmers to know their own cost and that cost control is vital to maintaining margins in winter-milk systems.
Liquid milk
When asked by the crowd what premium is need in 2023 for winter-milk producers, Dunne said it is not within the Teagasc remit to set winter milk premiums but rather to highlight the costs of production for an average winter milk cow.
He advised that farmers look within their farmgates at the cost of production and determine what premium they need for their farm.
But he added that winter-milk producers also need to look at efficiencies within their herds and ensure that the right cows are being used to produce milk on these farms.
He reminded farmers that a lot of milk sold off farms during the winter is sold at manufacturing price, so a focus on improving constituents within herds is important.
He added that there should be a focus on improving economic breeding index (EBI), fertility and utilise forage within winter-milk systems.
Also speaking at the event was Dr. Joe Patton from Teagasc, who said that to ensure that these figures are accurate, more winter-milk farmers need to outline their costs and complete a Teagasc e-profit monitor.
He said this the only way that accurate figures for winter-milk production will be possible.