April 2014 Newsletter

Milk price & supply, 2013 bonus, super levy on account, Carbery shares, Cellcheck workshops, milk quota trading, financial management, early compact calving delivers more profit

16 April 2014

Milk Price

The milk price for the month of March is the same as last month- 39.46 cents per litre (179.4 cents per gallon) at 3.60% butterfat, 3.30% protein and including 0.50 cents per litre Summer Somatic Cell Count bonus and VAT @ 5.0 %.

Milk Supply

The milk supply for the month of March was 12,479,881 litres ( 2,745,199 gallons) with an average butterfat of 3.97 % and an average protein of 3.15 %. This represents a decrease of 654,379 litres ( 143,944 gallons) on butterfat adjusted supply compared to March 2013. The Co-Op was approximately 0.84% or 1,240,000 litres over quota at the end of the March. The Department estimate that the country was 0.94% over quota at the end of March

2013 Bonus

At a recent Board meeting the bonuses for 2013 were approved. The Board agreed to pay 0.7 cents per litre on milk supplied in 2013 where purchases from the Society were greater than 6.0 cents per litre and 0.35 cents per litre where purchases were less than 6.0 cents per litre and greater than 4.0 cents per litre. No bonus is paid where purchases are less than 4.0 cents per litre. Also a bonus of €5.00 per tonne of fertilizer and €7.00 per tonne of compounded ruminant feed purchased in 2013 was approved and a bonus of €2.50 on pig feeds and straights. These bonuses are in addition to the 0.5 cents per litre milk bonus already announced from Carbery.

Super Levy on Account

Super Levy on account deductions are made this month. To reflect our final quota position, Category 1 suppliers (less than 350,000 litres or 76,900 gallons quota) are allowed supply up to 350,000 before they are subject to deductions. Any supply above 350,000 litres is classified as Category 2. Category 2 suppliers are receiving 65,000 litres leeway. The rate of deduction is 28.66 cents per litre. These deductions are based on indicative figures only and are before any national flexi milk allocations.

Carbery Shares

The Board of Carbery have announced a trading window for shareholders who wish to trade their shares from the 1st May 2014 to 31st May 2014. The most recent valuation has put an indicitative value of €1.77 cents on each share. All Carbery shareholders will receive correspondence from Carbery in relation to the Scheme.

Cellcheck Workshops

Cell Check workshops have been developed specifically for dairy farmers to help reduce cell count. Only small groups are allowed to attend and the course is interactive and practical, with half of the course taking place within a milking parlour. Presenters at the workshop include a vet, a milking machine and a milk quality advisor. If you wish to participate in the next Cellcheck workshop, please contact Tim Regan at 028-30800.

Milk Quota Trading

The results of the second stage of the 2014/2015 Milk Quota Trading Scheme have been announced by the Department. There were thirteen quota holders who offered all or part of their quota into the Scheme. The market clearing price in Drinagh was 10.cents per litre. All applicants to and from the Scheme have been informed of their result from the Scheme. Quota bought or sold through the Scheme will be transacted with effect from the 1st April 2014.

Financial Management

Teagasc intends to hold a half day introductory course covering these topics in the last week of May for any current Drinagh Suppliers or anyone intending to start milk production in the future. The day will be modelled on the similar day that was held on the Shinagh Dairy Farm in November 2013. People that participated in that day were very positive of the subjects covered and the discussion involved and on how much they learned from the day. If you want to learn more on these vital areas for your farm business book a place now on this course by contacting Tim Regan at 028-30800. Places will be limited to ensure this is an enjoyable and worthwhile learning experience.

Early Compact Calving delivers more Profit

The importance of fertility is greater in seasonal spring calving milk production than in an all year round liquid milk type production systems. A compact calving period in early spring is essential to match the intake demands of the cow to spring grass growth. Under milk quotas when the total volume of milk supplied was limited the optimum mean calving date was later. This was correct as it allowed the use of more cheap grazed grass to produce the fixed milk quota based on achieving a high profit per litre. Laurence Shalloo has looked at the post quota scenario and modelled what is the optimum mean calving date. The table below is part of his analysis. The optimum herd mean calving date post quota is mid-February. A later mean calving date will result in lower profit.

Herd Mean Calving Date 15-Jan 15-Feb 15 Mar
Milk yield/cow (kg) 5230 5177 4781
Margin /cow (24.5c/l) €22 €128 -€4
Margin /cow (29.5c/l) €301 €409 €251
Margin /cow (34.5c/l) €581 €691 €507

For these 6 weeks the most important job on the farm is to try to breed as many as possible in the first 3 and 6 weeks of the breeding season, it is the job that determines next year’s and future years profitability.

REMINDER – 2013 Bonus

0.7 cent per litre milk supplied €7 per tonne feed & €5 per tonne fertilizer purchased