Making the most of what you’ve got when margins are tight is crucial and asking basic questions could help you keep your business on track. A good start would be looking again at your production to check if your milk cheque is all it could be, says Patty Clayton, AHDB Dairy Senior Market Analyst.
With milk prices at their lowest for over six years, it’s more important than ever dairy farmers can achieve ‘top dollar’ for their milk.
To assist producers do just that, AHDB Dairy has developed and launched a new online tool, the Milk Price Calculator (MPC). The MPC allows dairy farmers to input the specific details of their milk, in terms of delivery profile and quality, and check if there is potential to increase the income available from their contract. Its value lies in providing a quick and easy assessment of how a change to any aspect of their milk profile will impact on the milk price paid.
While dairy farmers may not be able to change milk buyers at the moment, it may be possible for some to achieve higher prices for their milk by better matching what is in the bulk tank to what buyers pay the most for.
The complexities of milk contracts can make this a daunting task which is why the MPC is a handy, user-friendly tool for farmers and a ‘how to use’ video is available which gives a step-by-step guide to the calculator. The MPC allows you to ask the ‘what if’ questions such as ‘how would my milk price change if I managed to reduce my somatic cell counts or increased my butterfat?’ By entering the before and after farm data into the calculator, you are able to get two sets of outputs, allowing you to compare the differences and clearly see how changes impact your milk price.
AHDB Dairy has a range of tools and produces wider support to help you achieve maximum efficiency and optimise performance on farm by best managing costs and analysing productivity. One example is the Milk Forecasting Calculator, which uses information on herd size, average yield and calving patterns, alongside herd lactation curves to give producers information on the monthly milk outputs. This information can be used alongside the Milk Price Calculator to get a full picture of both cost and revenue implications of adjusting milk production. Visit http://dairy.ahdb.org.uk/milk-price-calculator
AHDB Dairy, as part of the Decisions4Dairy initiative, is running a series of one-day What If workshops specifically designed to test out different ways to adapt to the current challenges in the market. The workshops are an opportunity to take time away from the day-to-day farm tasks and to really focus on the robustness of the business. Attendees benefit from working with specialist consultants and sharing experiences with other farmers to explore their business using actual production costs as a base point (collated prior to the workshop). Importantly, the sessions offer the chance to test different scenarios for your business, including those within the Milk Price Calculator, to investigate the viability of investments and formulate a clear business plan for the future.
