Farm Contractor & Large Scale Farmer
    Twitter LinkedIn
    • FREE Email Newsletters
    • About Us
    • Advertise
    • Contact Us
    • Magazine Subscriptions
    Twitter LinkedIn
    Podcast
    Farm Contractor & Large Scale Farmer
    • News
      • Arable & Agronomy
      • Dealership News
      • Environmental Land Management Scheme/Policy
      • Event News
      • Health & Safety
      • Machinery
      • People
      • World News
    • Farm Machinery
      • Amenity & Maintenance
      • Cultivations
      • Drilling
      • Grassland Equipment
      • Harvesting
      • Muck & Slurry
      • Sprayers
      • Telehandlers
      • Tractors
      • Tractor of the Year
      • Tyres & Tracks
    • Precision Farming
    • Markets & Policy
    • Profiles
      • Company Profiles
      • Reader Profiles
    • Livestock
      • Beef
      • Dairy
      • Sheep
    • Magazines
      1. December 2023
      2. Agritechnica Preview Supplement
      3. November 2023
      4. October 2023
      5. September 2023
      6. August 2023
      7. Drills & Seeds Supplement
      Featured

      December 2023 Issue

      By Matthew TiltNovember 21, 2023
      Recent

      December 2023 Issue

      November 21, 2023

      Agritechnica Preview Supplement

      October 30, 2023

      November 2023 Issue

      October 30, 2023
    • Events
    • Podcast
    Farm Contractor & Large Scale Farmer
    Dairy

    Calm before the storm for dairy profits

    John SwireBy John SwireNovember 18, 20213 Mins Read
    Facebook Twitter LinkedIn Email
    Calm before the storm for dairy profits

    While the latest analysis of Promar Farm Business Accounts shows the year to March 2021 to be a better year for dairy farmers, the company warn that profits are likely to come under increasing pressure in the coming years.

    Farm Business Accounts (FBA) is the most comprehensive analysis of actual dairy farm financial performance available in the UK.  Neil Adams, Managing Director of Promar International says the results give valuable insight into farm performance and opportunities for improvement.

    “The year to 31st March 2020 was a rather benign year for dairy farmers, in part due to the reduced impact of Brexit and in part due to the pandemic.  Farmers generally were unable to complete investment projects and overall just spent less.

    Profit per cow up £33

    Calm before the storm for dairy profits
    Neil Adams

    “This resulted in a better financial year for the dairy sector with average profit per cow rising by £33.  This was due to a combination of a small increase in output combined with costs control across many areas, resulting in overall lower costs.”

    Mr Adams says there remains a considerable range in financial performance within the sample.  While the average farm made an operating profit of £226 per cow, the top 25% selected on operating profit per cow achieved a profit of £614 per cow.  They achieved a higher output per cow while managing to control all costs better and managed bigger herds.

    “The real concern at the moment is the significant prices increases seen in many major farm inputs.  Wheat and soya prices have risen 26%, electricity by 76% and oil by 100%.  We are also seeing major hikes in fertiliser prices.  Indirectly, the higher energy prices and the rising cost of transport will work through to other costs increases.  In addition it is likely that interest rates will increase, and all farms are having to react to reductions in Single Farm Payment.

    Costs to rise by 5.4ppl by March 2023

    “Not all these will work through to affect profitability in the year to March 2022 but will certainly have an impact in the year to March 2023.  Based on the FBA data, we estimate that costs will rise 2.2ppl in the year to March 2022 and another 3.2ppl to March 2023, an average increase of 5.4ppl.

    Mr Adams acknowledges that there are still a number of uncertainties about exactly how prices will develop.  He suggests global feed stocks may improve, helping moderate the effect on prices and it is possible gas prices will settle again.  Furthermore, milk prices are showing signs of improvement.

    “However, it is vital farm businesses assess the likely repercussions for their business which will depend on the system.  For example, an intensive system will be more at risk of energy price increases than a more extensive operation.

    “We would urge all dairy farms to budget and plan in detail and to understand the impact of changes in each cost.  Then they can determine the gap they need to fill and assess marginal costs and challenge every aspect of their system.  They need to identify threats and plan their response,” Mr Adams concludes.

    Tweet
    Share
    Share
    Pin
    Share. Facebook Twitter LinkedIn Email
    Previous ArticleMachine learning could accelerate disease detection in sheep
    Next Article Müller confirms 2ppl January farm gate milk price increase
    John Swire

    Read Similar Stories

    Hotline established for bluetongue virus

    November 24, 2023

    First bluetongue case in UK leads to increased calls for vigilance

    November 14, 2023

    Defra commits to cutting livestock emissions through feed products

    October 30, 2023
    Most Read Stories

    Angus farming cousins introduce new app to automate farming admin

    November 30, 2023

    20 years of trading for Vogelsang UK

    November 30, 2023

    Lynx to introduce new weight block at Lamma

    November 30, 2023
    Farm Contractor & Large Scale Farmer

    The UK's leading agricultural machinery journal

    Twitter LinkedIn
    © 2023 Lewis Business Media. All Rights Reserved.
    Lewis Business Media, Suite A, Arun House, Office Village, River Way, Uckfield, TN22 1SL

    Privacy Policy | Cookie Policy | Terms & Conditions

    • Farmers Weekly
    • AA Farmer
    • Poultry News
    • Pig World

    Type above and press Enter to search. Press Esc to cancel.

    We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “ACCEPT ALL”, you consent to the use of ALL the cookies. However, you may visit "Cookie Settings" to provide a controlled consent.
    Cookie SettingsREJECT ALLAccept All
    Manage consent

    Privacy Overview

    This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
    Necessary
    Always Enabled
    Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
    CookieDurationDescription
    cookielawinfo-checkbox-advertisement1 yearSet by the GDPR Cookie Consent plugin, this cookie is used to record the user consent for the cookies in the "Advertisement" category .
    cookielawinfo-checkbox-analytics1 yearSet by the GDPR Cookie Consent plugin, this cookie is used to record the user consent for the cookies in the "Analytics" category .
    cookielawinfo-checkbox-functional1 yearThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
    cookielawinfo-checkbox-necessary1 yearSet by the GDPR Cookie Consent plugin, this cookie is used to record the user consent for the cookies in the "Necessary" category .
    cookielawinfo-checkbox-others1 yearSet by the GDPR Cookie Consent plugin, this cookie is used to store the user consent for cookies in the category "Others".
    cookielawinfo-checkbox-performance1 yearSet by the GDPR Cookie Consent plugin, this cookie is used to store the user consent for cookies in the category "Performance".
    PHPSESSIDsessionThis cookie is native to PHP applications. The cookie is used to store and identify a users' unique session ID for the purpose of managing user session on the website. The cookie is a session cookies and is deleted when all the browser windows are closed.
    Functional
    Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
    Performance
    Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
    Analytics
    Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
    CookieDurationDescription
    _ga2 yearsThe _ga cookie, installed by Google Analytics, calculates visitor, session and campaign data and also keeps track of site usage for the site's analytics report. The cookie stores information anonymously and assigns a randomly generated number to recognize unique visitors.
    _gat_gtag_UA_31822138_191 minuteSet by Google to distinguish users.
    _gid1 dayInstalled by Google Analytics, _gid cookie stores information on how visitors use a website, while also creating an analytics report of the website's performance. Some of the data that are collected include the number of visitors, their source, and the pages they visit anonymously.
    Advertisement
    Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
    CookieDurationDescription
    OAID1 yearThis cookie is set when an AdsWizz website visitor have opted out the collection of information by AdsWizz service or opted to disable the targeted ads by AdsWizz.
    Others
    Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
    SAVE & ACCEPT
    Powered by CookieYes Logo