Farm business3 min read
How to calculate your milk production cost per litre (and lower it)
If you don't know what a litre of milk costs you, you can't know if you make a profit. A simple monthly method, a worked example and 7 proven ways to cut the cost.
Many dairy farmers sell milk every day and still feel they never have money. Usually the reason is simple: the cost per litre is close to, or higher than, the price they get. Once you know this number you can make better decisions about feed, cows and price.
Step 1: List every cost for one month
| Cost | What to include |
|---|---|
| Feed | Concentrate, green grass (bought or the cost of growing it), straw, minerals |
| Labour | Wages, and a fair value for family labour too |
| Health | Medicine, vaccines, dewormers, vet visits |
| Breeding | AI or bull service |
| Utilities | Electricity, water, fuel |
| Other | Rent, transport to the collection point, repairs |
| Depreciation | Shed and equipment cost spread over their useful life |
Feed is usually 60–70% of the total, so that is where savings matter most.
Step 2: Count the milk
Add up all the milk produced in the month, including milk fed to calves and used at home. That milk was produced and had a cost.
Step 3: Divide
Cost per litre = Total monthly cost ÷ Total litres produced
A worked example (5 milking cows)
| Item | Taka per month |
|---|---|
| Concentrate | 33,000 |
| Green grass and straw | 12,000 |
| Labour | 12,000 |
| Medicine, vaccines, AI | 3,000 |
| Electricity, water, transport | 2,500 |
| Depreciation | 2,500 |
| Total | 65,000 |
Milk produced: 5 cows × 10 litres × 30 days = 1,500 litres.
Cost per litre = 65,000 ÷ 1,500 = about 43 taka.
If the farm sells milk at 60 taka, it earns about 17 taka per litre before counting dry cows, calves and heifers that also eat. These are example numbers; use your own.
Step 4: Count the whole herd
Dry cows, heifers and calves eat but give no milk today. Include their feed in the dairy cost, or track them separately as the cost of your future milking cows. Either way, don't forget them.
7 ways to lower the cost per litre
- Grow your own green fodder. Napier and maize fodder are much cheaper per kg than concentrate.
- Feed by yield. A cow giving 15 litres needs more concentrate than one giving 5. Feeding them the same wastes money on the low yielder.
- Shorten the calving interval. Aim for a calf every 12–13 months; every extra month dry is a month of feed without milk.
- Prevent mastitis. Clean milking, dry teats and a clean floor save milk and medicine.
- Cull the persistent losers. A cow that repeatedly fails to conceive or always gives very little milk costs more than she earns.
- Buy feed in bulk and store it dry to avoid mould and price spikes.
- Keep records. You cannot improve a number you don't measure.
Let the app add it up
In FarmFlows, record daily milk per cow under Milk, and every expense and income under Finance (feed, salaries, medicine, AI and more). The finance report shows your monthly totals for the dairy, so you can see your real cost per litre and which cows earn their keep.
Quick checklist
- List all costs, including family labour and depreciation
- Count all milk, including milk fed to calves
- Cost per litre = monthly cost ÷ litres
- Feed is 60–70% of cost: start saving there
- Review the number every month