Estimated typical milk production costs for Great Britain

Published 30 January 18

Estimated typical costs for the 12 months ending October-2017                                                  

These figures aim to provide an up to date 12 month rolling estimation of typical costs of milk production for GB. They are based on actual historical figures which are then adjusted using changes in milk yields, concentrate usage and input prices. These figures are indicative of change and not aimed at giving absolute values. Figures are up dated every three months.  Next update: 1 March 2018                                                

Notes for interpretation:                                                                          

  • Top and bottom 25% ranked on Net Margin after Total Full Investment Costs of Production.                                                                    
  • Cash Only Fixed Costs exclude unpaid family labour and depreciation and include actual rent and finance costs.                                                               
  • Full Investment Fixed Costs include value of unpaid family labour, depreciation, rental value of owner occupied land and imputed finance costs.        

The 2015/16 figures previously used in updating the estimated costs of production can be found in the AHDB Dairy Evidence Report.The 2016/17 figures used below will be available in the 2018 Evidence Report coming soon.

Pence per litre

Top 25%

Bottom 25%

Herd Replacement Cost

2.8

4.4

Total Variable Costs

11.9

13.5

Cash Only Fixed Costs

7.8

11.7

Total Cash Costs of Production

22.5

29.6

Full Economic Fixed Costs

10.5

16.2

Total Full Economic Costs of Production

25.2

34.2

% change in CoP compared with 2016/17

2.4

2.2

 

£ per cow

Top 25%

Bottom 25%

Herd Replacement Cost

227

302

Total Variable Costs

967

919

Cash Only Fixed Costs

632

799

Total Cash Costs of Production

1,826

2,019

Full Economic Fixed Costs

850

1,106

Total Full Economic Costs of Production

2,044

2,327

% change in CoP compared with 2016/17

2.4

2.9

 

£ per hectare

Top 25%

Bottom 25%

Herd Replacement Cost

409

539

Total Variable Costs

1,743

1,641

Cash Only Fixed Costs

1,140

1,426

Total Cash Costs of Production

3,293

3,605

Full Economic Fixed Costs

1,534

1,974

Total Full Economic Costs of Production

3,686

4,153

% change in CoP compared with 2016/17

-0.5

-3.0

Key trends compared with 2016/17       

  • Milk yields have remained unchanged.
  • Replacement heifer prices in the markets are around 1% higher, on average, since March 2017. Dairy cull cow prices have have improved in recent months compared to eariler in 2017. These price changes mean the combination of these two trends estimates over 3% higher herd replacement costs compared to March 2017.
  • Collated monthly figures shows little change in concentrate usage since March 2017. This is alongside the background of concentrate prices continuing to increase slightly compared with last year. Overall, on a ppl basis, this results in a 4% increase in concentrate cost.
  • Other notable trends, compared with March 2017, have been the increased value of cereals, and price of fertiliser and fuel. Also, there have seen increases in the price of seeds and straw.

                                                              

The historical base data is from 328 farms in Great Britain collected by Promar International and its contributing partners. The base data is a stratified sample to represent the range of dairy systems found in GB. To estimate the up to date rolling 12 month costs of production, milk yield and purchased concentrate data supplied to AHDB by Promar Milkminder and Kingshay are used along side input price indices published by DEFRA and market information from AHDB.