What sort of margin can we expect to be left with?

摘要

Since we put our predictions forward this time last year, we have seen large scale increases in farm gate milk prices. The latest data from Promar Milkminder shows a 12-month average rolling price of 24.6ppl and this can be expected to rise over the next few months as the last months at the low 2007 prices are replaced in the average. But unfortunately input costs have risen considerably as well. We forecast that feed prices would rise from ￡132/t to an average for the year 2007-8 of ￡159/t - and the actual figure was ￡159.3! Our estimates of other costs were also close. These cost increases were included in our calculation of required milk prices, so the delivered milk price of 24.6ppl will have allowed margins to recover. In fact, the Milkminder average margin per cow has risen by over ￡350 in the last year and is still rising. So we have a realistic level of milk prices but a higher production cost base. For those farmers who have been able to reduce their dependence on purchased feed and fertiliser, there has been the opportunity to drive up margins. However, those farms with a higher dependence on purchased feed in particular will have experienced a slower recovery.