Financial rebound - but fragile margins

SOUTH West dairy farmers have experienced a notable financial rebound over the past 12 months, but margins remain fragile.

- STAFF REPORTER

That's according to the latest Milk Cost of Production Report, which was unveiled at the Dairy Show last week.

Stronger milk prices and easing feed costs have lifted average comparable farm profits to £644 per cow in the year to March 31, a significant recovery from just £153 per cow the year before, the report from Old Mill and the Farm Consultancy Group found.

Milk income rose by £425 per cow - a 15% increase - to reach £3,335, while the total cost of production climbed from £3,153 to £3,269 per cow. Non-milk income jumped from £395 to £578 per cow, helped by stronger beef prices. This tipped the balance back into profit, providing welcome news after the sharp squeeze of the 2023/24 period.

The average herd size in the survey increased from 295 to 322-head, with yields improving to 7,435 litres per cow, up from 7,256 litres the previous year, thanks in part to better silage made in 2024.

Feed costs eased by £19 per cow, but other inputs moved upwards. Labour costs increased by £29 per cow, with power, machinery, administration and repairs also rising, adding renewed cost pressure.