Reflecting on dairy herd productivity throughout the 2025 winter feeding period, significant transformations to dairy herd costings and profitability have been welcomed across Northern Ireland. Dairy herd profitability remains commodity-driven, with milk price and feed costs the most influential market forces. Recent financial and performance indicators present opportunities for dairy farms to optimise productivity and profitability:
Milk Price
Milk price is highly volatile with fluctuations largely based on supply-demand dynamics and seasonal variations.
The average milk price in January 2025 was 46.9p per litre (ppl), an increase of 11p from January 2024. This rise indicates a considerable shift in market demand and commodity value. With milk prices expected to remain strong into the summer of 2025, dairy farmers have the opportunity to increase revenue from milk sales, helping to offset other variable costs. The margin after all feed ranges between £5 -£10 per cow across farms driven mainly by milk yield performance. This highlights the importance of improving milk production efficiency, providing financial incentive for dairy farms to focus on optimising production during this period of higher milk value.
Feed Costs
Feed costs are one of the largest variable costs for dairy farms, typically accounting for 40-60% of total production expenses, significantly affecting profitability. In January 2025, the price of concentrate feed averaged £310 per tonne; down from £337 per tonne in 2024. This decrease in feed costs is a welcomed change, helping to increase margin per litre of milk produced.
The combination of lower feed costs and higher milk prices creates a favourable scenario; the average feed cost per litre of milk produced is 12.84p, whilst the margin over purchased feed per litre is 34.11p. These figures indicate a healthier profit margin, making it an ideal time to improve efficiency and maximise profitability on Northern Ireland Dairy Farms.
Feed Rate
Feed rate refers to the amount of concentrate feed required to produce one litre of milk. A feed rate of 0.45 kg per litre of milk is typically seen as economically robust across various cost conditions, above your milk from forage values.
In January 2025, the average feed rate in Northern Ireland was 0.41 kg, suggesting cost-effectiveness and providing a solid base for optimising production efficiency. This feed rate indicates efficient use of concentrates and maintains an economically viable balance between feed intake and milk production. Breakeven milk yield on many farms is currently around 7- 9 litres per cow, before we start to need to question some passengers within the herd.
The current milk price also justifies an increase in concentrate feed allocation to achieve higher milk yields above current production levels without negatively impacting overall profitability.
For more information on dairy herd costings specific to your farm, contact your local Fane Valley Feeds Representative or call 028 82243221.
