Break-even point analysis for milk production - Selected EU countries

Unstable conditions in the milk market in the Czech Republic (CR) and in the European Union (EU), mainly due to volatility of milk prices, are increasing pressure on dairy farmers to maximise production at the lowest possible production costs. Break-even point (BEP) analysis is a useful tool in dairy herd management for determining minimum requirements for profitability. BEP values for milk yield and milk price were calculated based on data obtained from 95 dairy farms in the CR. BEP values were estimated also for another eight EU countries based upon production and cost data from the EU Farm Accountancy Data Network (FADN). With the milk price ranging from EUR 28 to EUR 38 per 100 L and while excluding subsidies, zero profitability would be achieved on Czech dairy farms with milk yields ranging from 6 706 L to 13 151 L per cow and from 7 450 L to 14 088 L per cow in Czech Fleckvieh (C) and Holstein (H) herds, respectively. In order to achieve 5% profitability, the milk yield would need to increase by 21%. Considerable variability exists among EU countries in estimated BEP values depending upon average milk yields, input prices, and milk prices in different countries.