Milk costs reported within the media could be complicated and deceptive info for farmers, the dairy trade, and the general public. The premise of measurement and reporting varies extensively inside many international locations, not to mention when forex is taken into consideration.
Mostly milk value is reported as a price per quantity or weight of milk. For instance: cents per litre (cpl); per hundredweight ($/cwt); or euro per 100 kilograms. The foremost drawback with these value bases is that precise funds for milk are sometimes for the parts of fats, protein and different solids – only a few dairy processors pay for water! That you must know the composition of the milk and this composition adjustments from farm to farm and from nation to nation. There isn’t any one normal composition in terms of evaluating native and worldwide costs. Offered listed here are among the elements that should be taken into consideration when making comparisons.
Forex: That is an apparent challenge however consideration must be given to a alternative between: the present day by day price; the annual common conversion price; the weighted common conversion price. Within the latter case the forex change price ought to to be weighted to the timing of funds to farmers.
Fats and Protein Composition: It’s regular for farmers to be paid on the premise of the milk fats and protein composition. This may have a dramatic have an effect on on the milk value when expressed in cpl. So for instance the cpl milk value for a jersey cow with excessive milk parts could be greater than 50% increased than a fresian / holstein cow.
Typical composition of cows milk within the main world dairy exporters are: Europe – four.2% fats, three.four% protein; USA three.7% fats, three.zero% protein; New Zealand – four.7% fats, three.7% protein; Australia four.1% fats, three.three% protein.
So as to add to the confusion, reported USDA milk costs in $/cwt are based mostly on a fats composition of three.5% and the Eurostat milk costs are based mostly on three.7% fats.
There isn’t any normal for Australian and New Zealand milk value and the most secure measure of native value is when expressed as $ / kilogram of milk solids ($ / kg MS). Milk solids is outlined because the sum of fats and protein measurement in milk.
Mass or Quantity Measurement: In addition to the fats and protein composition of milk you additionally must know whether or not the take a look at measurement is expressed as mass / mass (eg. kg / kg) or mass / quantity (eg. kg / litre). The everyday density of milk is near 1.03 grams / litre so an error right here can have an effect on the milk value calculation by three%.
True or Crude Protein: Crude protein is an estimate of milk protein composition based mostly on nitrogen measurements (sometimes by Kjeldahl nitrogen testing). The milk protein content material is calculated from a global normal issue of Nitrogen x 6.38.
True protein is an estimate of the particular milk protein based mostly on calibrated close to infrared measurement. The distinction between crude and true protein equates to what’s termed “non protein nitrogen” (NPN).
It’s estimated that true protein measurement will give a outcome zero.1 – zero.2% decrease than crude protein. This may have an effect on the calculation of milk value by as a lot as 5%.
Within the US and Australia milk protein content material is often reported as true protein whereas within the EU and NZ, extra usually crude protein is used.
Instance Calculation: Right here is an instance of the way you may convert a reported milk value from one nation to a different taking account of the elements above:
A US farmer will get paid $US 11.50 / cwt for milk with a composition of three.7% fats and three.zero% true protein on a mass / mass foundation.
A New Zealand farmer needs to know what this equates to in $NZ / kg MS with the milk solids being equal to fats + crude protein. Assuming an change price of $NZ 1.00 = $US zero.70, and that crude protein = true protein + zero.15%, the calculation is as follows:
$US 11.50 / cwt = $NZ 16.43 / cwt
Milk composition = three.7% fats + (three.zero + zero.15) % crude protein = 6.85% milk solids mass / mass
1 cwt milk / 220.four = 45.four kilograms
$NZ $16.43 / cwt / 45.four / .0685 = $NZ 5.28 / kg MS CP (crude protein)
For an Australian Farmer there isn’t any want to regulate for crude protein – milk solids = %three.7 + three.zero% = 6.7%. Assuming an change price of $AU 1.00 = $US zero.87:
$US 11.50 / cwt = $AU 13.22 / cwt
$AU 13.22 / cwt / 45.four / .065 = $AU four.35 / kg MS TP (true protein)
A UK farmer needs to know what that is in pence cents per litre at their typical milk composition of four.2% fats and three.four% crude protein (~ three.25% true protein). This query is a bit tougher as a result of we do not know the worth of the person fats and protein parts. The most effective we will do is assume that the worth of milk solids is identical. That may give a fairly shut approximation if the ratio of fats to protein is comparable in each instances. So assuming: $US 1.00 = 63 English pence
$US 11.50 / cwt = 724.5 pence / cwt (7.25 English kilos / cwt)
724.5 pence / cwt / 45.four = 16.zero pence / kilogram
16.zero pence / kilogram x 1.03 = 16.four pence / litre
That is nevertheless the value at a composition of three.7% fats and three.zero% true protein. To get an estimate on the part pricing of the eu farmer apply the relative ratio of complete milk solids:
16.four pence / litre x (four.2 + three.25) / (three.7 + three.zero) = 18.2 pence per litre.
Over on the European continent they suppose in euros / 100 kg of milk. We’ll take a shortcut right here and convert from pence per litre to Euros / 100 kg assuming the identical milk composition because the UK farmer. With an change price of 1.00 euro = 92 English pence:
18.2 pence per litre = 19.eight euro / 100 litres
19.eight euro / 100 litres / 1.03 = 19.2 euro / 100 kg