For a long time, the gradual increase in the herd’s performance level was enough to ensure the profitability of the livestock unit. Today, however, the volatile prices of raw materials and finished products require a shift towards net margin–based reasoning.
It is therefore essential to rely on decision-making criteria that accurately reflect the farm’s overall and detailed relative performance, rather than its gross performance.
Milk production per day of life
This indicator, which is easy to calculate, reflects the overall technical performance of the dairy unit. Expressed in kg of milk per day of life, it is calculated as follows:
Number of lactations before culling × herd production level (kg/year) / (Number of lactations before culling × calving interval (days) + age at first calving (days))
This indicator is more relevant than herd production level alone, as it puts production into perspective by taking non-productive periods into account (in particular heifer rearing).
Moreover, a strategy based solely on increasing herd production level may prove unprofitable if it leads to premature culling of cows, resulting in a disproportionately high replacement heifer cost.
For information
An increase in herd production level of 100 kg/year results in a productivity gain of 0.1 kg/day, whereas reducing the age at first calving of heifers by one month or increasing the average lactation rank by 0.1 year leads to a 0.2 kg/day increase in productivity per day of life.
Controlling the heifer rearing period and increasing herd longevity are two key levers for optimising the economic efficiency of the dairy unit.
Overall production cost €/1,000 L of milk
This indicator represents the cost per litre of milk produced and provides insight into the breakdown of the costs involved (operating costs and structural costs).
As it requires a detailed analysis of accounting data, this approach should be supported by a specialist such as your farm management adviser.
Production cost is a key factor in any investment decision. Dairy farms with long production cycles need to consider certain operating costs (in particular heifer rearing) as structural costs.
The analysis of the dairy unit’s profitability must therefore include:
- productivity per day of life = the level of the unit’s technical performance
- production cost per litre of milk produced = the cost of technical performance.
Key points
- Feed costs account for between 25% and 45% of total production costs.
Controlling these costs is therefore essential to ensure the profitability of the dairy unit, as this is a lever on which action can be taken quickly and with a rapid return on investment.
- Working time (h/1,000 L of milk), which is often culturally underestimated, is extremely important for farmer well-being and the long-term sustainability of the farm. This is even more critical today with the end of milk quotas and the possibility of increasing production.
Under this criterion, time spent on routine activities (feeding, milking, AI, etc.) should be distinguished from time devoted to exceptional operations (mastitis, calf diarrhoea, etc.).
Final thoughts
The current dairy context requires the use of management indicators such as productivity per day of life (technical performance) and overall production cost (cost of productivity) in order to optimise net margin as effectively as possible.
On average, following the implementation of technical monitoring by a VERTAL distributor on a farm, an optimisation of production costs in the range of €15–30/1,000 L is observed.
For a long time, the gradual increase in the herd’s performance level was enough to ensure the profitability of the livestock unit. Today, however, the volatile prices of raw materials and finished products require a shift towards net margin–based reasoning. It is therefore essential to rely on decision-making criteria that accurately reflect the farm’s overall […]
...For a long time, the gradual increase in the herd’s performance level was enough to ensure the profitability of the livestock unit. Today, however, the volatile prices of raw materials and finished products require a shift towards net margin–based reasoning. It is therefore essential to rely on decision-making criteria that accurately reflect the farm’s overall […]
...For a long time, the gradual increase in the herd’s performance level was enough to ensure the profitability of the livestock unit. Today, however, the volatile prices of raw materials and finished products require a shift towards net margin–based reasoning. It is therefore essential to rely on decision-making criteria that accurately reflect the farm’s overall […]
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