Dairy farmers could be missing out on £55 million a year in lost revenue by not meeting milk buyer requirements for butterfat and protein, according to the AHDB.
Analysis of the 2020/21 season shows over 40% of milk destined for the liquid market and 55% for manufacturing fell below target butterfat levels, resulting in farmers missing out on £38m of additional income.
A further £17 million was lost by the 64 percent of farmers on manufacturing contracts who fell short of target protein levels.
Patty Clayton, AHDB lead dairy analyst, has encouraged farmers to work out a simple budget to understand whether the income generated by increasing solids outweighs the costs.
“Global demand for solids on the rise so, depending on your milk buyer, increasing milk solids is likely to be a positive long-term decision," she said.
An assessment of a sample of milk delivered to buyers during the 2020/21 milk year showed over 40% of the milk destined for the liquid market was delivered with a butterfat level of less than the base level of 4%.
For milk destined for manufacturing, the typical base level for butterfat is slightly higher at 4.2%, and around 55% of the milk delivered for manufacturing fell below this.
Meeting desired butterfat targets would have generated around £38m of additional income for farmers.
Farmers on liquid contracts do not typically achieve payments for surplus protein but may incur added costs to produce it. Despite this, over 40% of milk destined for this market exceeded the typical base level of 3.3%.
Manufacturers usually pay for milk delivered above a base value of 3.4% for protein. Around 64% of milk supplied missed this target, forfeiting an estimated £17m in payments.
Ms Clayton said: “At current payment rates, an all-year-round calver producing 1.5m litres a year would generate £3,600 of additional revenue per year by increasing their butterfat content from 4.0% to 4.1%.
"This could be as much as £5,400 per year depending on your contract. It’s important for farmers to assess their individual circumstances and pricing schedules before making any decisions."
