Conclusion

To be sustainable as a business it is important that in addition to operating safely and to the higest possible standards Henden is profitable, covering not just its operating, but also its depreciation and a return on capital.  This is like any business including the supermarkets such as M&S.

With this in mind we at Henden have more to do to convince the buyer of our milk to pay more AND to continue to improve the efficiency of our business.

An appropriate increase in the price would help us and ultimately our successors to run a dairy farm that would:

  • continue to produce the highest quality milk for Britain;
  • maintain high standards of staff welfare and health and safety;
  • maintain high standards of animal welfare;
  • maintain the safeguards that we work on to protect and improve the environment;
  • encourage new investment to ensure the farm's life is extended for years to come.

To achieve this goal and assuming a return on investment of 5% per annum on the £2.37 million of tangible and a small amount of intangible assets related to the Dairy farm the milk price that is required amounts to 37.34 pence per litre.  This is a 8.84 ppl increase on what we are likely to get this year, the equivalent of a 22% increase.  That said, with further operating improvements to be made on the farm this 8.84 ppl could perhaps be reduced to 7.00 to 7.50 ppl.