Management and Herd Economics

Economics of voluntary waiting period


Benchmarking Cost of Milk Production in 46 Countries
Torsten Hemme, Mohammad Mohi Uddin and Oghaiki Asaah Ndambi*
IFCN Dairy Research Center at the University of Kiel, Kiel, Germany

Abstract: The global dairy industry is facing challenges due to the extremely volatile milk price and a substantial
increase of feed prices. The goal of this study, therefore, was to compare and benchmark the cost of milk production in
46 countries representing 87% of the world’s total milk production, using a standard method developed by the
International Farm Comparison Network (IFCN). Two typical farms were selected per country; one average-sized and
one larger farm. The cost of milk production in 2010 ranged from 16.91US-$/100kg Energy Corrected Milk (ECM) in
Armenia to 97.27 US-$/100kg ECM in Switzerland, with cost differences mainly driven by the diversity in farming and
feeding systems. Based on costs, world regions were categorized into four levels: 40-50 US-$ in the EU, Middle East
and China; 30-40 US-$ in the USA, Brazil, CEEC and Oceania; 60 US-$ in Austria, Norway, Switzerland and Canada. The major drivers for this variation were ranked as; purchased feed cost (the highest) followed by labor, land and machinery costs. Regression analyzes showed that costs were highly correlated to yield and milk price but not to herd size.

World Average Cost of Milk Production Only ( US$/100 kg ECM).

(click on the tableĀ  to enlarge)

average cost