A reduction in milk prices, along with production costs remaining high, has meant that dairy farmers need to look at every cow within their herd.
A good milk price last year meant that nearly every cow in the herd was likely profitable, but this is not a year where the margin on milk is going to be high.
Because of this, it is important that any non-profitable or problem cows are removed from the herd.
In many co-ops, milk price has fallen 16c/L since the start of the year. Based on a 5,500L cow, this is a reduction in income of €880/cow.
If you are milking 100 cows that is a reduction in income of €88,000, if this decrease in prices is sustained for the year.
Dairy
Farmers need to determine what level of production is required within their herd for a cow to be profitable.
This will potentially have a huge variation depending on the farm and system operated.
Once that level has been determined, the next step is to look at all the cows that are below this figure and make a decision on whether or not they should remain in the herd.
Milk-recording data should have a vital role to play in this selection process.
As base milk-price creeps closer to the cost of production it is important that cows do not remain in the herd unless they are actually making money.
Culling
Ahead of the breeding season on dairy farms there will be some cows within the herd that will be marked not to be bred and usually, they will be culled at the end of the year.
But due to the high cost of production and low milk prices making margins tight, it may make more sense for these cows to be culled sooner than planned.
These cows are generally being culled for a reason and this reason generally relates to production issues.
Many of these cows are likely to have a low margin or some could actually be costing more than they are producing.
It is time to look inside the farmgate at ways of reducing costs and increasing margins on milk sold.
The simplest way to achieve this is to remove the cows from the system that aren’t meeting the levels of production required.