Small-ScaleDairy Farming Manual |
Volume 1 |
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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:
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How can you keep reception records?
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
of:
- cream - 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
8
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Example 2: Fat content of cream
9
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10
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How can you calculate production costs?
11 You know:
- how much you pay farmers for their milk from the milk payment scheme
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12
- how many l of milk you buy from the farmers
every
week or everymonth
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13
- how much you pay for electricity or for wood, fuel oil etc. |
14
- how much you pay for processing aids
e.g. starter culture, detergents, rennet, salt etc. from the bills
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15
- the costs of equipment e.g. trucks, tanks - buildings |
16
- the wages you pay your workers |
17
- how many units you produce of each product. |
18 When you calculate the costs of each
product
remember: fat is more expensive than skim milk. |
Example
4:
Production costs of market milk and butter This month,
the prices are: Milk price: 10 mu/l
Assuming
fat value is
The cost of 1 fu is:
From Example 3, each day: you receive: you produce: 200
1.2 fat whole milk >
195.4 13.4% fat + 2.1 kg
83% fat
Your daily payment to the farmer for milk is: 200 1x 10mh = 2000 mu/day Cost of l milk: Cost of 2.1 kg
milk (50%)=5mu
fat 4.6 kgx38%vfat
+ +
fat 3.4 fu x 1.19mu/fu milk 4.6
x 5 mu
=9.05 mu
=231 mu
Cost of 195.4 l milk
= 1,768 mu 1,999 mu ~ 2,000 mu
Cost 1 kg 231 mu = 110 mu
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You can calculate costs for each litre of milk you receive.
19
Each day you receive 200 l milk. Each month you receive: 200 l x 30 days = 6,000 l milk. |
Electricity costs
20 If your electricity bill for 1 month is 6,000 mu, your electricity costs are: 6,000 mu/month = 1 mu/l milk.
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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. 6,000 l/month |
Depreciation costs
22 When new, your buildings cost 100,000 mu. After
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.
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23
When new, your equipment costs are: 300,000 mu. After
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.
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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:
24
mu
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. |
25
You must add your profit to the total production
costs.
1 l market milk 11.5 30 % profit (11.49 x 30)
3.5
Sale price
15.0 mu
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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
l cream.
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26
mu butter 110.30 electricity
chemicals 0.25 depreciation
wages
packing materials 0.25 Total: 115.07mu/kgbutter |
27
Total production costs mu of 1 kg butter
115.00
Sale Price 150.00 mu/kg |
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