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Stackyard News Feb 06

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MDC’s tool enables dairy farmers to calculate profitability

A simple tool developed by the Milk Development Council (MDC) to help dairy farmers calculate the net profits or costs of finishing cull cows to go into the food chain goes live from Tuesday (February 14).

The web-based, user-friendly calculator - a joint development between MDC’s Farm Management and Economics departments - follows the end of the Over Thirty Month Scheme (OTMS) last month.

Cattle over the age of 30 months can now be sold into the food chain, either deadweight or liveweight.

Farmers will be able to calculate the additional return required to generate a profit for the extra feeding, housing, and labour input, says Brian Lindsay, head of MDC’s Farm Management programme.

He says: “It will help them work out whether it’s worth their while to invest in fattening cows from a business perspective, or whether it will detract from their core business of producing milk.

“The calculator is the latest FMP device which enables farmers to make informed decisions about their business.”

Farmers will be able to select a number of different types of basic feed, and factor in the cost of the extra housing and labour, in order to work out the cost-per-kilo of finishing off compared with the cost of selling the cattle earlier, explains Mr Lindsay.

He says: “Many farmers are now faced with the choice of what to do with their culled cows. We want to ensure that farmers are not putting extra effort into improving condition - for limited or no profit. Finishing cattle destined for culling may not be right for everyone and for some the additional costs will make them question the viability of this activity.”

Mr Lindsay cautions that users of the tool should also remember to add in additional costs of transport or agency fees which would be incurred whenever the stock is marketed.

Dairy farmer Don Griffin, who farms at Hinckley, Leicestershire, said: "Despite being designed by experts, this calculator is easy to use and could become a very useful tool in decision-making in our business."

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