Estimated typical milk production costs for Great Britain

Published 27 September 17

Estimated typical costs for the 12 months ending July-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: 3 January 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 used in updating the estimated costs of production can be found in the AHDB Dairy Evidence Report.

 

Pence per litre

Top 25%

Bottom 25%

Herd Replacement Cost

2.6

3.5

Total Variable Costs

12.0

13.1

Cash Only Fixed Costs

9.0

11.2

Total Cash Costs of Production

23.5

27.8

Full Economic Fixed Costs

12.2

16.4

Total Full Economic Costs of Production

26.8

33.0

% change in CoP compared with 2015/16

1.9

1.8

 

£ per cow

Top 25%

Bottom 25%

Herd Replacement Cost

201

252

Total Variable Costs

946

935

Cash Only Fixed Costs

706

799

Total Cash Costs of Production

1,852

1,987

Full Economic Fixed Costs

964

1,172

Total Full Economic Costs of Production

2,111

2,359

% change in CoP compared with 2015/16

-0.2

-0.4

 

£ per hectare

Top 25%

Bottom 25%

Herd Replacement Cost

368

407

Total Variable Costs

1,732

1,511

Cash Only Fixed Costs

1,293

1,292

Total Cash Costs of Production

3,393

3,210

Full Economic Fixed Costs

1,767

1,893

Total Full Economic Costs of Production

3,867

3,812

% change in CoP compared with 2015/16

-1.3

-6.2

Key trends compared with 2015/16        

  • Milk yields have decreased by an estimated 2.1%.
  • Replacement heifer prices in the markets are around 1% higher, on average, since March 2016. Dairy cull cow prices have have improved in recent months compared to eariler in the year. Despite these price changes the combination of these two trends estimates over 3% lower herd replacement costs compared to March 2016.
  • Collated monthly figures show a decrease of 2% in concentrate usage since March 2016. This is alongside the background of concentrate prices continuing to increase to be similar to last year. Overall, on a ppl basis, this results in a reduction in concentrate cost.
  • Other notable trends, compared with March 2016, 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.