AHDB is encouraging farmers to make a conscious decision about their herd’s calving pattern that enables them to compete, matches their market segment, complements their mind-set and takes account of any on-farm limitations or opportunities.
To support this, the Milk Price Calculator (MPC) has been upgraded, and now offers farmers the ability to easily compare how prices will be affected by any change to production system. With the added feature of providing a full year of monthly prices, farmers can easily assess how different milk profiles will affect their cash flow and annual revenues.
Most milk buyers pay premiums or apply penalties for seasonal profiles, so there can be a significant difference in cash flows throughout the year for all year round (AYR) and block calving systems.
Typical revenues generated through the year for the three calving systems were estimated and show that, unsurprisingly, an AYR system will normally produce a more even flow from milk sales than the annual peaks and troughs of milk sales in a block calving system. This was true for both the liquid and the manufacturing market.
However, for milk going into the liquid market, spring block calving systems are impacted more heavily by seasonal penalties, and therefore achieve lower annual revenues for the same volume of milk sales.
This should be balanced against the lower production costs typically associated with this system to assess the overall impact on the margins of the business.