Milk costs at Kerry vary 11c/l

Martin Ryan

A difference of up to 11c/l in milk production costs was recorded by Kerry Co-op monitor dairy farms last year.

The differential in production costs equated to almost 50pc of last year's milk price.

While the lowest production-cost farms achieved a profit margin of 10c/l -- without taking into account any margin of cost for the farmer's own labour -- producers with the highest production costs recorded a loss of more than 2c/l.

The monitor group is made up of specially selected farmers who operate by best practices to achieve the optimum efficiencies to maximise profit margins, and compare practices and results within the group.

Poor weather and historically low milk prices meant last year was a particularly difficult one for milk producers.

Kerry Co-op's total milk supply was 12pc under quota for the year, the largest undersupply recorded by the co-op since quotas were introduced more than a quarter of a century ago.

Variable costs of production within the monitor group ranged from 8c/l to almost 16c/l, and there was a variation from 5c/l to 12c/l in the fixed costs on the farms.


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With total costs between 14.2c/l and 25.2c/l, farmer returns ranged from a loss of 2.26c/l to a profit of 10.13c/l. The cost of home labour on the farm was not taken into account in the calculation, and any direct payments received were also excluded.

Co-op statistics also show that while there were more than 16,000 farmers within the area being served by Kerry Co-op in 1978, the number of farms on which milk was produced last year had dropped to 3,944, an exodus of more than 75pc in 21 years.

Irish Independent

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