ISSUE FOCUS FEED & ADDITIVE MAGAZINE April 2025 27 price situation, with not much less else to do. So how do we manage this "out of our hands" problem? The solution lies in optimizing cost of production. As the largest chunk of that cost is feed, a key focus for farm managers is to make sure every kilogram of feed is converted into productive output as efficiently as possible. Farm consolidation is a growing trend, resulting in fewer, bigger farms, but with roughly the same national head of animals. Crucially, these farms are producing more than ever before. The shift towards larger, more efficient farms is being driven by farmers’ increasing focus on performance and feed efficiency. Without this, farms are simply not profitable or viable businesses. However, feed efficiency is not a plug-and-play. The best, profitable, farms have skillful farm managers whose strategy that recognizes the positive correlation between cow health and welfare and high output. Combined with managing production costs and taking optimal sale prices. Recording and using data is key to this success, allowing farmers to fine-tune their operations based on real-world results rather than assumptions. It’s not about asking for higher prices for milk or beef, but instead managing the cost of production to remain profitable despite fluctuating ingredient costs. A well-managed farm in a high-cost region can outperform a poorly managed farm in a lowcost region simply by managing feed and stock better. COST OF PRODUCTION VS. SALE PRICE: WHICH MATTERS MORE? One of the most critical questions farmers should ask themselves is whether they focus on the price they receive for their products (milk, beef, etc.) or the cost of producing that product. When talking to a dairy farmer, and asking what would help them the most to improve their profitability, logically most of them will reply "we need a better milk price". However, milk price does not have such a high correlation with profitability as much as the effective operating costs per kg of milk. Share of costs of feed components on total costs Farm types Regions Western Europe CH UK FI AT DE NL BE LU FR ES PT IT IE DK PL CZ HU LV RO RS UA BY RU KZ AM TR IL IR TN DZ EG NG CM UG KE ZW ZA CA US MX CO AR UY CL BR PE IN PK BD ID JP CN AU NZ Central and Eastern Europe, Middle East Africa North and Latin America Asia Ocenia Purchased feed (concentrate, roughage) Land costs for feed production (land rent, opportunity costs own land) Variable costs for homegrown feed (only fertiliser, seeds, herbicides, pesticides, irrigation) Other costs related to feed production, feeding and manure handling (machinery, fuel, labour, capital) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
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