British dairy farmers see profit halved

Between March 31, 2018 and March 31, 2019, the profit on a dairy farm in the United Kingdom decreased from €6,62 per liter to €3,02 per liter. Per cow this amounts to a decrease from €430 to €158. According to the accounting firm, the decrease is mainly due to the very dry summer of 2018. As a result, production costs increased from €2.455 per cow to €2.707 per cow, which was partly due to the fact that more feed had to be purchased.

Higher milk price
The decrease in the UK milk production was partly compensated in higher milk prices. This resulted in milk income equivalent to €2.546 per cow, while last year it was approximately €2.551 per cow. According to Old Mill, this meant that dairy farms could only make minimal profits last season, and that had to be done from non-milk income (such as sales of calves or slaughter of cows).

The comparison between the top 10 companies and the bottom 10 companies is striking. The farms in the top region generally had larger herds (270 cows versus 151 cows), but also had lower yields than the farms at the bottom of the list (6.695 liters versus 7.385 liters). "However, the average profit for the top 10 amounted to €13,62 per liter, while the bottom companies realized a loss of €7,25 per liter. The first group spent €320 less on concentrates, but more on roughage. "These cost savings were ultimately important."

Challenges remain
However, the accounting firm expects revenues to recover only marginally this year. “Looking ahead to the 2019/2020 dairy year, a better summer, higher yields and lower feed costs should increase profits by around €0,80 per liter to €3,82 per litre.” On the other hand, the agency reports that there are now demonstrably more uncertainties than last year, such as Brexit.