How your milk cheque affects breeding decisions

When selecting bulls for this breeding season, Irish dairy farmers should consider how they can leverage milk traits to enhance farm profitability. The majority of Irish dairy farmers are paid under A+B-C systems, which means they receive payment for kilograms of protein and fat but are deducted for volume. This payment structure means that choosing bulls that boost milk production in terms of solids rather than liters could be crucial for maximizing profits.

While farms must continue to focus on increasing milk volume, it is essential to ensure that the milk produced contains a high proportion of solids. There is little point in producing 30 liters of milk per day if the solids content is low, as this will not translate to a higher income. Understanding how the A+B-C system works can help farmers make informed breeding decisions.

The base price of milk, often cited as 33.46 cents per liter (excluding VAT), is determined by the price co-ops pay for a kilogram of protein and fat. The A+B-C model calculates this base price by adding the protein and fat kilograms and then subtracting the volume adjustment. The resulting price per liter is valid as long as quality and hygiene standards are maintained.

Currently, milk prices may seem challenging, given the significant drop from the previous year. Some farmers may question the value of breeding for solids, feeling that they are not fairly compensated for their efforts. However, the impact of solids on the paycheck becomes apparent when comparing herds of the same size producing the same volume of milk but with different solid levels.

Consider two farms with 100 cows each, producing 5,000 liters of milk per cow per year, totaling 500,000 liters or 514,850 kilograms of milk. Both farms have different solid levels, but the same total milk volume.

In the first example, the milk supplied is 500,000 liters or 514,850 kilograms, with a protein percentage of 3.6%. This results in 18,535 kilograms of protein. At a price of €6.684 per kilogram of protein, the total income from this herd would be €123,885.

In the second example, the milk supplied is the same, but the protein percentage is 3.3%. This results in 16,990 kilograms of protein. At the same price of €6.684 per kilogram of protein, the total income from this herd would be €113,561.

This comparison highlights the importance of selecting bulls that improve the solids content of milk. By focusing on breeding programs that enhance protein and fat percentages, farmers can significantly increase their income, despite the challenges posed by fluctuating milk prices.

In conclusion, as Irish dairy farmers prepare for the breeding season, it is crucial to prioritize milk traits that boost solids production. While volume remains important, the A+B-C system means that maximizing protein and fat content can lead to substantial financial benefits. By understanding the intricacies of the payment system and making informed breeding decisions, farmers can drive profitability and ensure a sustainable future for their dairy operations.