Economic implications of compositional quality and production systems

Abstract

Proposed changes in milk pricing to be introduced on 1 April 1984 will make milk fat payments 53% of total milk returns. Current breed averages indicate that Jersey returns will show the greatest improvement at £40 per cow but will still be £100 lower than Friesian returns. Additionally, the higher calf and barren cow values enhance the Friesian, although this can be offset if Jerseys achieve a 50% increase in longevity compared with Friesians.The proposed seasonal differentials give a milk price variation around the mean of 29%, compared with the present 13%. However, in 1969/70, the variation was 36%. Milk values by month of calving on the new proposals vary by a maximum of £87 at a yield of 5000 1. August to October calving gives the highest and February to May the lowest milk income after seasonal adjustment.Farm examples show that block-calving herds have seasonal quality trends that will be highlighted by contemporary payment. In the past, arithmetic averages have put block-calving herds into higher-quality classes than was warranted. Contemporary payment penalizes lapses in quality immediately. Conversely, improvements will be immediately rewarded. Summer-milk producers will have a dramatic decrease in their traditional cash flow in May and June. Comparison of weekly sample results and monthly averages with the same period last year, and with the England and Wales monthly average, enables economic corrective management steps to be taken.The cost of computerized out-of-parlour feeders depends on herd size. Justification of their cost can be based on changes in milk sales by volume and/or compositional quality.