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Estimated milk production costs

April 2020

Showing how GB milk production costs have changed over time. The monthly costs on this page are estimates based on farm accounts from the 2018/19 financial year. They include the costs of rearing replacement heifers. They are averages of the previous 12 month period.
This page is updated every three months.

Changes in milk production costs

  • These estimates are based on the 2018/19 financial year, which was unusually costly for spring calvers - the drought in summer 2018 pushed up feed and forage costs significantly for these herds. Their costs have fallen since but the true scale of this decrease won't be fully known until we receive farm account data for 2019/20.
  • The cost of milk production in GB is estimated to have decreased by around 1ppl between April 2019 and January 2020.
  • Despite this, costs are still relatively high compared to recent years - costs for the 2018/19 financial year were the highest since 2014/15.

Reasons behind the changes

The decrease in milk production costs since April 2019 is mostly due to:

1) Lower forage and bedding costs, due to lower prices

2) Lower fertiliser costs, due to lower prices

3) Slightly lower overheads, due to a rise in yields diluting costs on a per litre basis

Latest estimated costs

These costs are estimates. You can find more detail on how they are calculated under “Additional information”, further down this page.

Production costs vary between farms. If you would like to know more about the range in production costs, you can find out more by downloading the Dairy Performance Results 2018/19.

Estimated GB milk production costs (including replacement heifer rearing) for the 12 months ending January 2020

Additional information

  • This page is to help look at changes in the cost of milk production over time.
  • The costs on this page are based on farm accounts from over 300 dairy farms. We have used costs for the 2018/19 financial year and adjusted them for the most recent changes in:
    • Input prices
    • Concentrate usage
    • Milk yields
    • Milk solids
  • The cost of rearing replacement heifers is included.
  • The costs are averages for the previous 12 months. January 2020 costs are the average for the 12 months from February 2019 to January 2020.
  • If you would like to explore milk production costs in more detail, you can download the Dairy Performance Results 2018/19. This includes data from over 300 GB dairy farms, which the figures on this page are based on.
  • The cost estimates on this page are for guidance only, to help put recent market changes into context.
  • We show estimated costs for AYR, autumn and spring calving systems, to allow you to compare your own costs with figures for the system you use.
  • Farms were ranked by the ratio of their outputs to inputs (a measure of their productivity) to produce the top, middle and bottom sets.
  • Full economic cost of production is the total cost of milk production, including:
    • A value for unpaid family labour
    • Depreciation of machinery, equipment and buildings and
    • An imputed rental value for owned land.
  • Cash cost of production only includes costs that the farm will literally make a payment transaction for. Therefore it does not include:
    • A value for unpaid family labour
    • Depreciation of machinery, equipment and buildings and
    • An imputed rental value for owned land.