A lot of dairy farmers are unsure as to whether they will actually be better off under the current pricing, allowing for the increases in costs. The main cost increases are seen in the “3 F’s” – Feed, Fertiliser and Fuel. Assuming that the milk price for most has increased by 7-8 pence per litre, returns have increased by an average of £560 per cow.

Costs have increased by £70 per tonne for feed, £150 per tonne for fertiliser and 40% for fuel. The combined effect of these cost increase is around £320 per cow or 4.3 pence per litre. For the average dairy farmer, there should therefore be an extra profit of £240 per cow, or 3.2 pence per litre.