Costs on Farm

What costs are there on a livestock farm?

• vet & medicine spend

• bedding

• purchased feed

• homegrown feed (including fertiliser, costs of harvest)

• labour

• administration (accounting, etc)

• property and energy costs

What are the 2 ways costs commonly termed?

fixed or variable

Fixed costs

overheads that don’t change in direct proportion to size of the enterprise

variable costs

vary with the size of the enterprise

Name examples of fixed costs

• labour

• administration

• machinery and equipment

• property and energy costs

Name examples of variable costs

• vet and medicine spend

• bedding

• purchased feed

• homegrown feed

What is the biggest ongoing cost to a farm?

feed

What can you loosely categorise cattle feeds into?

forage and concentrate

How can forage be fed?

• fresh

• stored to be fed when animals housed

What is silage most commonly made from?

grass or maize

Where is forage usually grown?

on the farm

What does ‘concentrate’ feeds include?

• compound feed

• straights

• moist feeds

• liquid feeds

• supplements

What is the silage and concentrate mix called?

total mixed ration

Where do they normally get hard feeds/concentrates?

bought in from feed company

What sources of income are there on dairy farms?

• milk sales

• calf sales/other beef sales

• cow sales (cull cows/cows at end of productive life)

What sources of income are there in a lambing flock?

• fat lambs

• store lambs

• cull ewes

• replacement ewes

• breeding rams

• wool

What sources of income are there on a suckler herd farm?

• calves sold at weaning, as stores, or as fattened stock

• sell breeding females (and less commonly bulls)

What other sources of income are there on different livestock farms?

• lambing flock

• livery yard

• B&B

• solar panels

What is used to measure the productivity of farms?

key performance indicators

What do “Kingshay” offer to dairy farmers?

• costings service - sort of accountancy specific to farming

• benchmarking against other similar types of herd to see how they are performing cost wise against other dairy farms with a similar system/herd size

• research and information service including education/knowledge transfer to farmers

What is the equivalent to “Kingshay” for beef and sheep farmers?

farmbench

What doe “margin” mean in accounting terms?

difference between cost of producing a product and the revenue it generates

What is the “margin” used to measure?

profitability of a business

What does net margin demonstrate?

profit of a business once all expenses have been deducted

What is the net margin of top performing flocks like?

positive net margin - profit

What is an easy way to look at the profitability of a dairy farm?

compare output (milk) against their greatest cost (feed)

How could a farmer improve their profitability?

• control costs of overheads and variable costs (economy of scale)

• increase output

How can you increase output of a farm?

• increase yield

• increase herd size

• get better milk price or find additional products to sell (diversifying)

Beyond costs, what other things do you think would be sensible for vets to monitor to assess a flock/herd’s performance?

• health

• reasons for culling

• indicators of welfare

• medicines use

What health related things should vets monitor to assess a flock/herd’s performance?

• rates of lameness

• mastitis

• other specific conditions

Name indicators of welfare

• body condition score

• mobility score