Dairy Farming: all milk and honey?

It was a real pleasure to talk to so many dairy farmers at The Dairy Show recently. Many have a vision for the future of their farm and are prepared to make the investment to achieve their aims.

However, they are facing many challenges: availability of labour, slurry storage, increasing numbers and improving cow accommodation, and always with an eye on the acquisition of more land. All of which require capital to address and all of which we are accustomed to financing at FOLK2FOLK.

Some may think dairy farming is all milk and honey, but to make the milk takes money, and an increasing amount at the moment. I am not sure what constitutes the ‘basket of goods’ that enables the ONS to declare inflation has fallen to 3.1%, but the basket certainly does not contain a bag of nitrogen fertilizer, a bag of cow cake, or a can of red diesel! As mentioned at a recent Albert Goodman seminar it is “The three F’s: fertilizer, feed, and fuel” that are putting all farming businesses under pressure and increasing the amount of working capital required in the business.

The Dairy Show provided the platform for the release of the Old Mill/Farm Consultancy Group ‘Milk Cost of Production Report 2021’. I would urge everyone who has a dairy herd to read this very comprehensive report which highlights: “The gap widens as the top 10% outperform the bottom 10% by over £1,300 per cow, with cost control being the key driver of profitability”.

Increasing costs are a big challenge to profitable dairying, even more so in 2022 if you have had to pay over £500/tonne for nitrogen and £300/tonne for cow cake!

Even at a Dairy Show, there was much talk about beef prices. The almost unbelievable prices being achieved for dairy-bred baby calves, store cattle of any age and barren cows, is making a significant contribution to the accounts for a dairy farm. Is it sustainable? The trade suggests so; with supply tight and beef more expensive across Europe than here in the UK, prices might plateau a little but no dramatic changes.

A highlight on the eve of the Dairy Show was to sit and watch the Young Handler classes. It is fantastic to see the enthusiasm and skills of the next generation. FOLK2FOLK is very pleased to sponsor the Young Handler classes once again at the Cornish Holstein On-Farm Challenge 2021. It looks like the future of dairy farming is in capable hands.