Analysis of client data by local dairy consultant Jason McMinn, suggests the costs to produce milk in NI have increased by 9p/l in the last five years.
Over the period, concentrate costs are up 3.5p/l, heifer-rearing expenses have increased 1.1p/l, higher purchase agreements and loans have added an additional 1.2p/l and drawings and tax have increased 0.7p/l.
Other costs associated with producing milk are up 2.5p/l.
When compared to total costs of 26p/l across farms in 2018, that equivalent figure now stands at 35p/l.
“That total cost figure has been in the late 30s throughout 2023, but falling now towards 35p/l,” confirmed McMinn.
At the prices paid by local processors for December milk, it means farmers are on average, just about breaking even.
However, those December prices are boosted by various winter bonuses, a number of which do not apply from January onwards.
Our milk league analysis also shows the rolling average price across 2023 for each individual processor ranges from 33.59p/l to 35.53p/l, significantly behind the peak in costs seen in the earlier part of the year.
“Profits have gone off a cliff completely with a lot of farmers down £1,000 per cow on the milk cheque since March 2023,” said McMinn.
He estimates that many of the dairy businesses he has assessed in recent weeks won’t make much profit in the 2023/2024 financial year, so tax payments on account are not necessary in a lot of cases.