Just 40 per cent of UK dairy farmers know their cost of production, the Royal Association of British Dairy Farmers (RABDF) has claimed.
The body has urged farmers to adopt a five year plan knowing their contract and cost of production. It claimed this was vital to dealing with future volatile markets.
RABDF policy director Tim Brigstocke said: “An estimated 60 per cent of dairy farmers are not aware of their true costs of production, according to a consensus of leading dairy consultants, a percentage figure which has not improved over the last 10 years.»
Mr Brigstocke said it was important to start measuring this figure, taking into account family, labour and provision for retirement or farmers would be unable to understand profitability.
He said: “We would also urge all dairy farmers to know exactly what their milk buyer wants in terms of volume, profile and constituents, in other words they must know their contract and how to maximise milk price.
«Finally, they must have a five year plan that is realistic and achievable in order to be able to accurately budget income and expenditure in a potential volatile marketplace.”
The RABDF claims come amid one of the most severe downturns the dairy industry has seen in recent years.
Source: FGInsights