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News > Controlling the costs of milk production – Herd Review


Controlling the costs of milk production – Herd Review

April 30, 2020

Mark Scott, Senior Dairying Adviser, CAFRE, Newtownards

Throughout the COVID-19 crisis there will undoubtedly be turbulence in the market for agricultural produce. It is important that farmers do everything in their power to ensure their business can weather this storm until markets around the world and at home settle once again. This is the final article in a series of three which looks at options to control costs on Northern Ireland dairy farms in order to remain resilient throughout the current crisis.

Critically assess the milking herd

At times of poor milk price the once marginally profitable cows within your herd begin costing you money. A cow giving 15 litres and eating 4kg meal when milk is 27ppl and meal £260/t has a margin over concentrate (MOC) of £3.01/day. The same cow when milk is 21ppl and meal is £280/t has a MOC of £2.03. 40kg of silage at £25/tonne takes another £1 from this or full time grazing another 80p and you are left with a margin of £1.03 – £1.23 per cow per day to cover all other costs. If this cow is confirmed in calf it may be more economical to dry her off. If in later lactation and not PD+ she should probably be culled.

In times of pressure on margins it is important not to let herd averages hide poor performing cows. The average yield, fat, protein and SCC of the herd may be fine, however it is important to look at individual cows at the poorer end of the herd. These cows will be reducing the overall margin generated by the better performing cows in the herd. For this reason it is essential to continue (where possible at this time) to milk record throughout difficult financial periods and use the information generated to make better decisions. This is also a key time to know the fertility status of all animals. The importance of fertility at a time of financial pressure is to ensure cows calve and you have milk volume when better prices return. Fertility monitoring should continue regardless of milk price and should not be on the list of costs to cut.

Keeping more heifers than are required for replacements and selling at the point of calving will generate cash but is generally not profitable on commercial farms.
The heifer enterprise

Until the point of calving heifers are a cost to the system with no output. In order to reduce the overall cost of replacements it is essential to calve heifers at 24 months. A heifer calving at 30 months could have been in milk for 180 days if calved at 24 months. Even at an average of 25 litres per day and a milk price of 21ppl the 30 month calving heifer has cost you £945 in lost milk sales. In addition to this it has been shown through research that heifers calving at 24 months have improved lifetime performance.

With the rise in popularity of sexed semen and also with many herds tightening their calving pattern there are herds carrying more heifers than are required for replacements. This can create additional financial burden on the overall business with additional fodder, grazing and concentrate input required for this expanding enterprise. The cost of rearing heifers is considerable and well reared heifers that have been fed to meet their weight gain targets are a significant investment. For this reason selling heifers to generate cash is generally a bad idea. Although this will produce a lump sum of cash, when costs are accurately calculated this is generally not a profitable option for commercial herds. Also remember that your heifers have the best genetics on your farm and selling these off, even for one year, will be to the detriment of progress in the herd as a whole.

Staying on the subject of breeding, after enough cows have been bred to dairy semen to allow for replacements, breeding lower end cows and those which fall outside your desired calving season to beef semen will be a future cash generator. The value of dropped calf sale becomes much more important when milk price falls so the more cows calving to beef sires the greater this income stream will be.


1. Don’t satisfy yourself that herd averages look ok, now is the time to make decisions about unprofitable cows.
2. Continue to milk record where possible or make use of past recordings, this will help you to make good decisions and the benefits far outweigh the cost.
3. Fertility is more important than ever, not least because it is essential to have cows ready to produce volume when prices recover.
4. It’s OK to sell surplus heifers but retain your core replacements for a profitable herd in the future.
5. If you are in a Business Development Group your Dairying Adviser is still working and can advise you on any of the issues raised in this article.