Measuring to manage: The key to success for dairy farmers

As in many other sectors, dairy farmers are currently facing a difficult time due to the coronavirus pandemic.

An increase in meal prices, alongside a drop in milk prices, means that monitoring the cost of production has never been more important.

CAFRE dairy advisor Zara Morrison, has highlighted a simple way of monitoring production costs as follows: calculate the herd’s margin after deducting monthly feed costs (purchased concentrate) from monthly milk sales. This is known as Dairy Margin over Concentrate or DMoC.

Zara said: “DMoC can be found within DAERA online services, under the CAFRE Benchmarking option. Using this simple DMoC recording system allows you to measure performance on a monthly basis and enables you to manage the herd going forward.”

It can help to make decisions on necessary changes, recognise trends, plan for the future and compare your farm against others.

Gathering information

The key to successful cost control is to start gathering information at the end of each month. To begin, calculate the number of cows in milk and dry cows.

Following that, gather the total concentrates fed to dairy cows and cost per tonne. Then, look at milk production which means the litres sold and the litres fed to calves.

Next comes the evaluation of milk quality and finally, milk value; minus the cost of transport.

“Next you need to login to DAERA online services through the Government gateway which can be done on any internet-enabled device and select ‘CAFRE Benchmarking’ followed by ‘Dairy Margin over Concentrate’ from the list of options available,” Zara added.

The results can provide your own DMoC (£/cow/day); while it can also provide milk yield (L/cow/day), milk from forage (L/cow/day), concentrate fed per litre (kg/litre), concentrate cost per litre (p/L) and concentrate fed per cow per day (kg/cow/day).

“A comparison table includes every dairy business, anonymously, that has submitted information and you will be able to view the top performing herds along with the average. Your own business will be highlighted and ranked within the table.

“This will allow you to compare with others and, as part of a Business Development Group (BDG), your advisor will be able to compare your group separately.

“Ring your local CAFRE dairy advisor to discuss how DMoC can assist you to measure and manage your dairy business through this difficult time,” Zara concluded.