The document discusses the milk-cost ratio, an indicator used by the National Association of Danish Dairy Farmers to measure profitability in milk production. The milk-cost ratio compares the price received for milk to the costs of feed, shelter, milking equipment and interest. A ratio between 2.0-2.25 generally indicates profitability for Danish dairy farmers. Graphs and data presented track the milk-cost ratio and farm earnings in Denmark and Europe over time. The document aims to provide transparency around production costs and competitiveness for dairy farmers.
De Europese Rekenkamer onderzoekt momenteel de uitzonderlijke maatregelen die de EU heeft getroffen om de verstoringen op de zuivelmarkt tussen 2014 en 2017 tegen te gaan. De controleurs gaan na of deze maatregelen, waarmee ongeveer 740 miljoen EUR uit de EU-begroting gemoeid is, goed waren opgezet en of deze de effecten van de verstoringen
voldoende beperkten. Ook bekijken de controleurs of de Europese Commissie en de lidstaten nu beter zijn voorbereid op toekomstige verstoringen van de melkmarkt.
Sustentabilidade na Cadeia de Produção de Leite na Europa - Cesareequipeagroplus
Apresentação - Sustentabilidade na Cadeia de Produção de Leite na Europa - Cesare, feita durante o workshop Aplicação Prática de Sistemas de Mensuração de Sustentabilidade na Gestão da Pecuária Leiteira - UFV
Mission: We create a better understanding of the dairy world by providing comparable data, knowledge and inspiration.
The network approach – consisting of three pillars - the network of researcher - the network of companies/institutions and - the IFCN center with > 15 dairy economists.
The slump in dairy markets in the 2014/15 season has had detrimental impacts on both dairy farmers and Cheddar manufacturers
Retailers meanwhile have seen gross margins improve over the period as retail prices have remained stable
The pressure on gross margins at farm level is evident in the increased rate of producer exits from the industry
The processing industry has also been hard hit with some cheese manufacturers reporting financial losses or halting production during the year
This report was publish by UK levy paying body DairyCo and offers a view on the efficiency of UK dairy farmers. More information can be found at http://www.dairyco.net/library/market-information/milkbenchplus.aspx
To have at least two (and up to six) typical farms for each region.
The first farm is an average sized farm with an average management performance. The second farm is larger than the first one but also having an average management performance, to show economies of scale.
They represent major milk production systems, farms, milk produced in region
De Europese Rekenkamer onderzoekt momenteel de uitzonderlijke maatregelen die de EU heeft getroffen om de verstoringen op de zuivelmarkt tussen 2014 en 2017 tegen te gaan. De controleurs gaan na of deze maatregelen, waarmee ongeveer 740 miljoen EUR uit de EU-begroting gemoeid is, goed waren opgezet en of deze de effecten van de verstoringen
voldoende beperkten. Ook bekijken de controleurs of de Europese Commissie en de lidstaten nu beter zijn voorbereid op toekomstige verstoringen van de melkmarkt.
Sustentabilidade na Cadeia de Produção de Leite na Europa - Cesareequipeagroplus
Apresentação - Sustentabilidade na Cadeia de Produção de Leite na Europa - Cesare, feita durante o workshop Aplicação Prática de Sistemas de Mensuração de Sustentabilidade na Gestão da Pecuária Leiteira - UFV
Mission: We create a better understanding of the dairy world by providing comparable data, knowledge and inspiration.
The network approach – consisting of three pillars - the network of researcher - the network of companies/institutions and - the IFCN center with > 15 dairy economists.
The slump in dairy markets in the 2014/15 season has had detrimental impacts on both dairy farmers and Cheddar manufacturers
Retailers meanwhile have seen gross margins improve over the period as retail prices have remained stable
The pressure on gross margins at farm level is evident in the increased rate of producer exits from the industry
The processing industry has also been hard hit with some cheese manufacturers reporting financial losses or halting production during the year
This report was publish by UK levy paying body DairyCo and offers a view on the efficiency of UK dairy farmers. More information can be found at http://www.dairyco.net/library/market-information/milkbenchplus.aspx
To have at least two (and up to six) typical farms for each region.
The first farm is an average sized farm with an average management performance. The second farm is larger than the first one but also having an average management performance, to show economies of scale.
They represent major milk production systems, farms, milk produced in region
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Milk-cost ratio
1. Milk-cost ratio
- an indicator of
profitability in milk
production
The National
Association of
Danish Dairy
Farmers
2. Milk-cost ratio
- an indicator of profitability
in milk production
Made by Landsforeningen
af Danske Mælkeproducenter
(The National Association
of Danish Dairy Farmers)
3. The income of a dairy farmer
consists of his dairy money.
But there are also production
costs.
All cows in Europe need feed,
shelter and milking equipment
to produce milk.
The profit of a dairy farm is
the difference between the
dairy money and the production costs.
4. ‘An army marches on its
stomach’ Napoleon said.
All cows need feed and shelter.
Costs for labor, adviser,
veterinarian, contractor etc.
differ from country to
country, and are part of each
dairy farmer's competitiveness.
q
But feed, shelter and milking
equipment are necessary for
all.
5. The following calculations
are based on an EU
standard dairy cow.
The average yield per cow per year is
9.000 kg of milk. This cow daily eats
equivalent to 6.5 kg of wheat,
6.5 kg of maize, 1.4 kg of canola
and 1.6 kg of soy. All feed is
purchased at market price on the MATIF
exchange in Paris.
Land, shelter and milking equipment
cost 9,000 Euros. This
means that the cowshed costs the
interest expenses of one Euro per kg milk
produced. The return is calculated on the
basis of the Euro Bund price, 10 years,
six per cent.
7. Milk-cost ratio based on milk price
and costs for feed and interest
The graph shows the relationship
between current market prices for milk
and resulting, calculated costs for
feed, shelter and milking equipment
plus interest costs.
2.60
2.40
2.20
2.00
1.80
1.60
1.40
1.20
date
14-05-2000
24-12-2000
05-08-2001
17-03-2002
27-10-2002
08-06-2003
18-01-2004
29-08-2004
10-04-2005
20-11-2005
02-07-2006
11-02-2007
23-09-2007
04-05-2008
14-12-2008
26-07-2009
07-03-2010
17-10-2010
29-05-2011
08-01-2012
19-08-2012
29-03-2013
M/C-ratio
Milk/Cost ratio
Milk/Cost
For updated graphs, please visit our website at
http://www.maelkeproducenter.dk/00001/00113/
9. FAQ
A ration without roughage
The described ration meets the basic
nutritional needs. Though not
applicable in practice, the ration
represents a value equivalent to the
value of a cow's ration. If a farmer can
feed cheaper or sign good
contracts, this improves his
competitiveness as a dairy farmer.
Prices are transparent in the sense
that they are based on prices of the
MATIF exchange in Paris.
10. FAQ
Labor
The cost of labor varies widely within
Europe and is part of the
competitiveness of the individual
farmer. Some places wages are so
high that part of the work is placed by
investments in mechanics and
machinery. Therefore, labor is not
included in the fixed costs.
11. FAQ
Investing one Euro
Some farmers inherit their parents'
farm, others must pay a lot for land
and buildings. In any
case, land, shelter and machinery
represent a value that must be
remunerated.
If you are able to produce milk for an
investment of less than one Euro per
kg, you have a competitive
advantage; if the investment exceeds
one Euro per kg, this represents a
competitive disadvantage.
12. FAQ
Comparison with one’s own farm
The graphs cannot be directly
compared to the production of a
single dairy farm.
13. FAQ
Political regulation of milk prices
The graphs are designed for use in
the political debate on the regulation
of the milk production and on how it
can be done using a dynamic model.
If the MC curve goes below the value
of 2 for more than three consecutive
months, a production regulation can
be introduced. For example in the
form of a premium for drying off
earlier than scheduled, a slaughter
premium or the like.
14. Need more
information?
Please contact Landsforeningen
af Danske Mælkeproducenter
(The National Association
of Danish Dairy Farmers)
www.maelkeproducenter.dk
ldm@maelkeproducenter.dk
+45 70 23 11 14
Thank you for your attention…
