HERFS/AUTUMN BONUS TYDSKRIF 2026

Margin over feed – is it more useful than price per ton in the dairy industry? Elzanne Fourie – Technical Advisor: Dairy When themilk price decreases and the cost of rawmaterials climbs, farmers often look for a way to save a few bucks. While there aremany areas to address on-farm that could help alleviate high costs, most often it is the feed price that is the first to be discussed. On average in a dairy herd, the cost of onemonth’s feed is more than 33% of onemonth’s milk cheque, which is why it seems to be themost obvious place to savemoney. In reality, it is the margin over feed that should drive the decision to increase or reduce the price of feed per ton, rather than the cost per ton of feed alone. The reason for this is that the margin is what drives profit, while cost does not always accurately reflect production potential. Cost per ton can fluctuate depending on the availability of raw materials, the international market, and even the diesel price. Yet, even when taking all those factors into account, the difference between a R5 500,00/ ton meal and a R4 500,00/ton meal is more than likely due to the nutritional value of the meal. This is because all meals are influenced by those external factors – the international market, availability of raw materials, etc., with some only slightly more than others, due to the inclusion levels of specific raw materials. A general rule of thumb when trying to decide whether to increase or decrease the cost of feed per ton, is to assess how much milk you need to lose or gain to cover the difference. For example, when deciding whether or not to decrease feed cost per ton, use the following equation to determine the breakeven on lost litres. Herfs/Autumn 2026 BONUS www.agribonus.co.za 92