The profitability of a dairy production can be calculated and assessed for the whole herd or for a single cow and this is dependent on the record keeping method adopted by the farmer. However, there are major economic factors which affect milk production in dairy farming and the factors include dairy breeds, calving interval, feed quality, yield/cow, price/litre and seasonality. These and other factors are discussed in this article.
In general large breeds produce more yields per lactation than small breeds but with less butter fat percent. For example, the Holstein breed in Zimbabwe produces above 6500kg/lactation with above 3.5% butterfat as compared to the jersey which produces about 4800kg/lactation with 5% butterfat. The Red Dane is heat tolerant and resistant to endemic diseases, for example mastitis.
With growing age, the cows’ (milk) productivity falls, hence the need to cull old cows to avoid wastages of feeds. Also, 365 days calving interval is ideal for each cow in the herd and whenever the calving interval is over 400 days, the cow should be considered infertile. This means you should expect a calf/cow/year.
Cows fed inadequately will not exploit their full genetic potential for milk yield, hence cows should be fed according to their full feed requirements. Feeding should be of a balanced diet matched to milk production, milking techniques and breed for attainment of high milk yields. Costs of feeds should also be kept minimal as they take up 60-70% of the total variable expenses. Furthermore, milk prices are normally high in winter due to reduced milk production. Farmers are therefore encouraged to supplement feeds in winter to maintain high levels of milk production.
To curb for feed costs, Henderson Research Station demonstrated that costs can be subsequently reduced if dairy cows are fed with a high concentrate diet from an early age, and are weaned at 24 days of age. Farmers are advised to grow improved pastures and save by buying a protein and mineral supplement and mix this with home- made maize meal.
Cold and hot weather reduces milk yields. In cold weather, more feed is used to produce body heat leading to low milk production. In hot weather, cows lose appetite, drink more water and seek shade at the expense of feeding in order to dissipate heat.
Mastitis is a major health condition in milk production. The bacteria destroy the alveolar tissue (milk producing tissue in the udder) thereby negatively affecting milk yield and milk quality. This can only be overcome through hygienic practices during and after milking. Also, internal and external parasites are a threat in this enterprise. They need to be controlled frequently and should be checked regularly before they become an economic threat.Thus, costs of chemicals for dipping, dosing, vaccination and dairy sundries are regularly incurred in an attempt to minimize disease and parasite proliferation within the dairy herd.
A regular established routine must be followed by every farmer and this is a very important aspect in dairy management. Sticking to strict milking times and milking procedures, feeding regimes, handling of cows and avoidance of noise is very important during milking.
Product promotion is also necessary in the dairy industry as this ensures that the milk is distributed in the minimum possible time by the farmer. Thus, storage facilities (cooling system), marketing and distribution as well as processing and packaging materials may also add up to the dairy farmer’s expenses. This is because milk is highly perishable hence needs some processing for it to stay longer while well-packed milk fetches a better price in the market. Cheese, lacto, sterilized milk and yoghurt fetch higher on the market than raw fresh milk.
Summarized below are factors affecting the profitability of dairy enterprises in the context of profit is equal to gross output less variable and fixed costs.
Gross output – milk yield, milk quality, calving index, seasonality, herd life of cow, costs of replacement, calf value, milk price
Variable costs – casual labour, dairy concentrates, supplementary feed, vet, dips, medicines, dairy sundry, forage costs, storage, processing, packaging, tractor operations
Fixed costs – rent, rates, buildings, overheads, permanent labour