South West Dairy Farmers See Substantial Profit Recovery
Sourse: dairynews.today
The latest report highlights a significant financial recovery for South West dairy farmers, driven by increased milk prices and decreased feed costs.
South West dairy farmers experienced a significant financial recovery over the past year. According to the latest Milk Cost of Production Report from Old Mill and the Farm Consultancy Group, unveiled at the Dairy Show on October 1, stronger milk prices and reduced feed costs have boosted average comparable farm profits to £644 per cow for the year ending March 31, 2025. This marks a substantial recovery from just £153 per cow in the previous year.
The report reveals that milk income per cow increased by £425, a 15 per cent rise, reaching £3,335. Non-milk income also saw an increase, rising from £395 to £578 per cow, supported by strong beef prices.
Despite this positive trend, the report warned that profit margins remain fragile, with increasing costs continuing to exert pressure on the sector. Bradley Causey from Old Mill stated, "Overall, the rise in milk income of around 4.9p per litre was not completely offset by costs, which have slowed the rate of increase. Milk prices began to tick up partway through the 2024/25 period, and feed prices continued to soften, following a trend since April 2023. These two key trends have therefore both moved in a positive general direction for dairy farmers in 2024/25, which we can see trickling down to create increased comparable farm profits."
However, a substantial difference in profitability persists between the most and least efficient producers. The top 10 per cent of farms achieved profits of £1,098 per cow, while the bottom 10 per cent experienced a loss of £497 per cow. Allaster Dallas from the Farm Consultancy Group noted, "Those businesses that successfully controlled power, machinery and labour costs made the most of increasing milk prices in 2024/25. The most profitable farms averaged 540 cows, compared with 198 cows in the bottom group."
Looking to the future, the report forecasts milk income in 2025/26 to rise to £3,465 per cow. However, costs are expected to climb further, resulting in a forecasted profit of £514 per cow, down from the 2024/25 peak but still ahead of the 2023/24 low point and broadly in line with the four-year average of £520.
The report reveals that milk income per cow increased by £425, a 15 per cent rise, reaching £3,335. Non-milk income also saw an increase, rising from £395 to £578 per cow, supported by strong beef prices.
Despite this positive trend, the report warned that profit margins remain fragile, with increasing costs continuing to exert pressure on the sector. Bradley Causey from Old Mill stated, "Overall, the rise in milk income of around 4.9p per litre was not completely offset by costs, which have slowed the rate of increase. Milk prices began to tick up partway through the 2024/25 period, and feed prices continued to soften, following a trend since April 2023. These two key trends have therefore both moved in a positive general direction for dairy farmers in 2024/25, which we can see trickling down to create increased comparable farm profits."
However, a substantial difference in profitability persists between the most and least efficient producers. The top 10 per cent of farms achieved profits of £1,098 per cow, while the bottom 10 per cent experienced a loss of £497 per cow. Allaster Dallas from the Farm Consultancy Group noted, "Those businesses that successfully controlled power, machinery and labour costs made the most of increasing milk prices in 2024/25. The most profitable farms averaged 540 cows, compared with 198 cows in the bottom group."
Looking to the future, the report forecasts milk income in 2025/26 to rise to £3,465 per cow. However, costs are expected to climb further, resulting in a forecasted profit of £514 per cow, down from the 2024/25 peak but still ahead of the 2023/24 low point and broadly in line with the four-year average of £520.
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