Milk farming non-profitable?.., page-3

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tomuchtime

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31/05/16

21:34

Post #: 17917151
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Originally posted by aparbery ↑

At 7.3% solids converts to 29.2 cents per litre if his cows do 20 ltrs a day per cow which he should do, $5.84 per cow. I have a mix of irrigation and dry, we make 75% of our hay and buy all our grain. Our current feed cost is $4.20 per cow This is just cost of feed no labour ,electricity,rates, vet bills, or cost of producing own hay and as you could imagine numerous other costs. $1.64 left to pay rest of bills it will be hard to do , especially when feed isn't all that expensive at the moment thanks to good season here in NSW. But when we hit droughts these feed costs can easily double. We hold 12 months feed in reserve and put money aside for the inevitable dry times that come. We are an established dairy in family over 100 years with low debt. But for people trying to start up from scratch , cows $2000.00 each then you need young stock coming through, if you milk 100 cows you need 30 heifers coming behind them calving in as 2 year olds they would cost around $1500 each , $245 000 for 100 cow herd with replacements. Then if you had to build a dairy even a small one would be $500000. By the time they repay debt there is no money to build a feed bank and they really struggle. Nsw pay rates are substantially better than Vics. At $4.00 per kilo I couldn't make money , and we milk close to 1000 cows economy of scale comes into this as well. Hope we don't see $4.00. 16 years ago my father was on close to 60 cents a litre .

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But what is your break even milk price or cash neutral price?

MGC Price at posting: $1.00 Sentiment: None Disclosure: Held
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0 Great analysis

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