Do you know your ABC?

Most Irish co-ops pay for milk on an A + B – C basis, where A is the price paid per kilogram of protein, B is the price paid per kilogram of fat and C is a processing cost deduction.

Teagasc, in its latest newsletter, has outlined how the payment system works for the average dairy farmer.

Table 1 details the calculation of milk price for two farmers who have supplied 50,000 litres of milk in April 2014 with different constituent levels. Farmer A supplied 62kg additional protein and 217kg additional fat in the same volume of milk.

ABC table

Teagasc says this was worth €507 and €773 respectively in additional milk revenue. Protein is the most valuable constituent and the ratio of protein to fat value is 2.3:1 in mthe table below. The ratio of protein to fat values differ between milk processors and will depend on your milk processor’s product mix.

Teagasc stresses that it is important that farmers know what their processor is paying per kg of fat and protein – this information should be printed on your milk statement.

It notes the while milk price has been at historically high levels for the last number of months, it is worth remembering that the first defence against the risk of low milk price is to ensure that you are maximising your milk price.

Teagasc researchers, Laurence Shalloo and Una Geary, have shown that dairy farmers have a significant ability to increase their milk receipts by increasing milk solids’ concentration (more kilograms in the same volume), producing milk with an optimum supply profile (earlier and more compact calving pattern) and improving milk quality (lower SCC levels).

Genetics, replacement rate and management will drive improvements in the first three items while your milking routine will have a big impact on the final item listed. Dairy farmers must ask themselves how committed they are to making improvements in these four areas.

Teagasc tips to improve cash flow during May are:

  • aim to cut high quality silage so as to nreduce the requirement for concentrates next winter;
  • remove surplus paddocks for baling once cover per LU exceeds 200kg DM/LU;
  • minimise drop in weekly milk production and maximise milk protein content by ensuring that cows are offered high quality grass at all times – pre-grazing yields of 1,200 – 1,500kg DM/Ha.