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DAIRY FINANCIAL MANAGEMENT AVERAGES
The latest Dairy Financial Management Averages are posted here each month.  These are rolling twelve-month averages, expressed in various ways.   Please feel free to use the information.   Here is an explanation of the codes.
Download the latest Dairy Financial Management Averages  and  Year-on-Year Comparable Financial Averages
The Dairy Financial Management Averages report includes columns labelled L/CIH (litres per cow in herd). The idea behind these numbers is to make meaningful between-year comparisons. The unit of currency, instead of being rands, is litres. The validity of the inter-year comparisons assumes that the price of milk will track the rate of inflation.
I've prepared comparative tables of the group's 12-monthly averages in L/CIH each year over the last five years. Hopefully you will find this interesting if not useful.


A graphical analysis of Historical Dairy Financial Management Averages between 1988 and 2020 has been posted for your information.
The milk price has increased by an average 7.1% per annum since 1988 (r2 = 98.1%).
The cost of production to NFI has increased by an average 6.6% per annum since 1988 (r2 = 98.0%).

We have posted a set of comparative graphs depicting the Average of the Top Third and Bottom Third of the group between 1988 and 2014. These figures are expressed in rands per cow in herd monthly.
 

Annual average milk price and cost of production excluding financial costs, drawings and new capital items as at
approximately February of each year of our clients. Exponential regressions are the thin solid lines.

The graph below is the monthly retail low sulphur diesel price in KZN inland since January 2016.  Over this period, the actual diesel price has increased by an average of 0.8% per annum (r2 = 83.2%) and the deflated price (Dec 2016 = 100) has increased by 0.4% pa (r2 = 61.4%).
The following graph depicts the consumer and producer whole milk price between Jan 2000 and Jul 2014. Note that the scale is the same but the two graphs are on different axes. The producer received 35.0% of the consumer's rand in 2011, 37.2% in 2012, whereas in 2013 he received 37.5%. To date, Jan to Jul 2014, the producer received 39.6% of the consumer's price.
 

 
Below is a graph of the annual average composite fertilizer prices. The actual composite fertilizer price has increased by an average 10.5% per annum since 1993 (r2 = 92.2%).
When one adjusts the price by the milk price and expresses each years fertilizer price in litres - how many litres does it cost to buy a ton of composite fertilizer? - then we find that the real fertilizer price has increased by 3.2% per annum (R2 = 57.9%).
 

 

 
Dairy meal makes up the biggest expense item of our group. The actual average price of dairy meal (Meadow's Budget Pride 14% being the measure of choice here) has increased by 8.1% per annum (R2 = 92.9%).
The real price of dairy meal, what it costs in terms of litres of milk, has increased by 1.28% per annum (R2 = 35.1%).
Over the period of this analysis, the price of dairy meal has varied from 634 (in 1997) to 916 (in 2003) litres of milk per ton. In 2013 it averaged 915.6 litres of milk per ton of dairy meal.
 

 
Below is a graph of the monthly composite fertilizer prices and the price of dairy meal (as reflected in the price of Budget Pride 14%).
Please note that the graphs are not of course on the same axis.

This page last updated 16 April 2020

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