Winter-milk: Know your cost of production

Knowing your cost of production within a winter-milk production system is vital, to ensure a vital margin can be maintained.

At a winter-milk event held by Lakeland Dairies and Teagasc on the farm Andrew Gilliland, near Ballybay, Co. Monaghan the average cost of production for a winter-milk cow in 2023 was outlined.

Based on Teagasc predictions, not including capital repayments, drawings and taxation – the average cost is €2,386 for 2023.

This is down slightly on 2022 figures of €2,397, but are still significantly higher than the cost of production in 2021 of €1,934.

Although costs are unlikely to drop back to 2021 levels, controlling the costs within the farm gate was a key message from the event.

With using high quality forage a key way of winter-milk producers reducing their cost of production.

Winter-milk

Winter-milk production is a high cost production system, with the majority of the cost coming from feed and fertiliser.

The figures outlined by Teagasc represent an average cost of production for winter-milk herds, but some being below this figure while others will be above this.

Based on a herd with an average production of 6,000L, this would equate to a cost/L of 40c, for a 6,500L herd it is 37c.

This cost projections for 2023 are based on farms using all quantities of inputs as 2022.

James O’Donoghue, a dairy advisor based in Monaghan said said the costs are similar to 2022, but that farmgate milk price has seen a considerable fall since last year.

He noted that in 2022, the high milk price sheltered winter-milk producers from the increased cost of production.

The fall in base price since this year, means that controlling cost for farms operating this system is going to be vital to maintain a margin.

He advised farmers to know their own cost and that cost control is vital to maintaining margins in winter-milk systems.