A look at the profitability and prospects for a typical UK
dairy business.
The table below shows Andersons' 'Friesian Farm'
model. Milk price increases look like restoring profitability for a
typical dairy business in the current year. However cost rises are
soaking up a large part of higher revenue, so overall profitability
remains marginal. The prospects for 2012/13 look better, but this
relies on the market delivering further price increases, and costs
abating.
Friesian Farm produces 1.125 million litres from 150 cows and
their replacements. It has year-round calving and is on liquid
contract. It is 100ha (of which 40ha are rented on a farm business
tenancy). The proprietor provides labour along with one full time
worker (plus casual/relief). The table shows the farm's
performance for the previous two milk years, based on actual
returns and costs. An estimate is given for the current 2011/12
year, and a forecast budget for 2012/13.
