Dairy Farming Manual
What should you know about basic production and business calculations?
|1 How can you keep reception records?(4)
You should know how to keep records of the quality, price etc. of milk coming into your centre.
|2 How can you calculate fat contents for standardization?(5-10)
You should know how to:
- calculate the fat content of your products.
|3 How can you calculate production costs?(11-27)
You should know how to find the costs of:
How can you keep reception records?
Note: 1 fu = 1 part fat in 100 parts milk
How can you calculate fat contents for standardization?
5 Before you can adjust the fat content (standardization), you must separate:
- the cream from
- the skim milk.
Note: See also T8 Milk Payment.
|6 Check the fat content of your cream and whole milk or skim milk.|
|7 Calculate the amounts
- skim milk
- whole milk
you mix to get the correct fat content for your product.
Note: See T3 Milk Quality Control for a method of checking the fat content.
Example 1: Fat content of standardized milk
Example 2: Fat content of cream
How can you calculate production costs?
|11 You know:
- how much you pay farmers for their milk from
the milk payment scheme
- how many l of milk you buy from the farmers
week or everymonth
- how much you pay for electricity or for wood, fuel oil etc.
- how much you pay for processing aids
e.g. starter culture, detergents, rennet, salt etc. from the bills
- the costs of equipment e.g. trucks, tanks
- the wages you pay your workers
- how many units you produce of each product.
|18 When you calculate the costs of each
fat is more expensive than skim milk.
Production costs of market milk and butter
fat value is
The cost of 1 fu is:
From Example 3, each day:
you receive: you produce:
1.2 fat whole milk >
195.4 13.4% fat + 2.1 kg
Your daily payment to the farmer for milk is:
200 1x 10mh = 2000 mu/day
Cost of l milk: Cost of 2.1 kg
fat 4.6 kgx38%vfat
fat 3.4 fu x 1.19mu/fu milk 4.6
x 5 mu
Cost of 195.4 l milk
= 1,768 mu 1,999 mu ~ 2,000 mu
Cost 1 kg 231 mu = 110 mu
You can calculate costs for each litre of milk you receive.
Each day you receive 200 l milk.
Each month you receive:
200 l x 30 days = 6,000 l milk.
20 If your electricity bill for 1 month is 6,000 mu, your electricity costs are:
6,000 mu/month = 1 mu/l milk.
|Costs of chemicals
21 If your bill for chemicals is 1,500 mu for 1 month. Your chemicals costs are:
1,500 mu/month = 1/4 mu/l milk.
22 When new, your buildings cost
20 years, you assume:
They lose value each year:
Assuming they lose the same value each year, depreciation costs/month:
100,000 mu = 417 mu/mon
You assume your milk production stays the same.
Therefore depreciation costs/l milk:
417 mu/month = 0.07 mu/l.
When new, your equipment costs are:
10 years, you assume:
Assuming it loses the same value each year,
300,000 - 50,000 mu = 2,083 mu/mon
Therefore, depreciation costs/l milk:
2,083 mu/month = 0.35 mu/l.
Example 5: Total milk production costs of market milk
See Example 4 where 3.4 % pasteurized market milk cost 9.05 mu/l.
Your total production costs for 1 l market milk are:
Total production costs for
1 l 3.4 % pasteurized milk = 11.49mu
Note: For your own production,add all of your other costs e.g. Transport, water etc.
You must add your profit to the total production
1 l market milk 11.5
30 % profit (11.49 x 30)
|Example 6: Total production costs of butter
See Example 3 where you need:
4.6 l of cream to make 2.1 kg of butter
So for 1 kg of butter, you need
4.6 = 2.2
packing materials 0.25
Total production costs mu
of 1 kg butter
Sale Price 150.00 mu/kg