The cost of producing winter milk this year is set to increase significantly, according to Teagasc predictions.
This week, a number of events aimed at winter milk producers are taking place across the country, with the first having took place in Co. Meath on Monday (November 21).
A large group of farmers attended the farm to hear the latest updates and advice for winter milk producers from Teagasc.
Winter milk
A study conducted by Teagasc, using profit monitor data, shows that the cost/cow is set to increase by €748 in 2022 when compared to 2021.
This is an increased cost of 11.44c/L based on a herd producing 6,510L at 4.20% fat and 3.52% protein (521kg of milk solids).
This figure does not include capital repayments, drawings and taxation.
The analysis used 2021 as the base year and compared its costing to 2022, with all input levels remaining the same.
The increased costs are based on a €160/t increase in concentrates, 250% increase in fertiliser, 50% increase in contractors cost and other variable cost increasing to 10%.
The results of analysis accounting for increased cost/cow:
- Feed €300;
- Fertiliser €221;
- Vet €9;
- Breeding €5;
- Contractor €81;
- Other varibale cost of €18.
This resulted in an increase of €634 for total variable cost along with a €114 increase in total fixed cost.
Of significant note is that feed accounted for almost half of the variable cost increases and 40% of the total cost increases.
This means that the cost/cow has gone from €1,934 in 2021, to €2,682 in 2022 a €748 increase.
Based on these figures the cost of production/L in 2021 was 29.71c/L, and is it predicted to be 41.15c/L in 2022 – a 11.44c/L increase.
Again, it is important to highlight that capital repayments, drawings and taxation are not included in these figures and will likely add an additional 10-15c/L.
Cost of production
The most significant increase in the cost of production for winter milk producers, based on the analysis, is the cost of feed.
Speaking at the event on Monday, Teagasc dairy advisor Vincent Tracy said: “If you want to make savings on a farm the feed is the big carrot.
“If you make a 1% or 2% saving on feed costs it will make a big difference.”
Although it is important that cows aren’t underfed, it is important that the feed is used on the correct cow and matches the silage quality being fed.
A real key message from this is that farmers need to have analysis done on feed supplies on farms and ensure that overfeeding is not taking place.
On split herds, grouping cows based on their stage of lactation is also advised to ensure that the feed is being used by the correct cows.