Pricing Challenges Faced by the Dairy Farming Sector
One speculated misconception about the dairy farming industry is that it is full of profits. But, only the people who are in this industry are well-aware of what they go through daily. One common challenge most people face is the undesirable pricing of milk. What leads to these undesirable milk prices, and what challenges do the dairy farmers face? Let’s dive into this post to know.
The dairy farmers cannot get the desirable milk prices because pricing depends on many factors. So, the farmers struggle with many challenges to get a fair price and profit.
- Feed cost- Managing the feed cost is a big challenge for the dairy farming industry. The feed cost keeps fluctuating, but the demand remains the same. The increasing feed cost brings challenges to the dairy farming sector. What a dairy farmer earns today will spend on buying the feed the next day. This reduces or eliminates the profit.
2. Demand affects the price- The demand for milk dominates its price. If the demand for milk is low in the local area, the price will be low. Because of the low demand, the farmers will have to sell milk at low costs, which decreases their profit margins.
3. Competition in the market- The competition in the dairy farming industry is increasing, which certainly affects the milk price. In such a scenario, not only does the quality of milk matter, but the cost also matters. Therefore, the farmers sell milk at low and undesirable costs to gain more customers and reduce milk wastage.
4. Long supply chain- One of the main price challenges for farmers is the cost of multiple people involved in the process. A farmer with a bigger dairy will have more people involved and pay more labor costs. The cost of labor, transport, wholesaler, and shopkeeper will be deducted from the profit.
5. Farm maintenance- Capital is required to maintain the farm and run it smoothly. The dairy farmer needs a 24 hour supply of water and tanks to store that water. Also, they may need a cold storage area to keep the milk fresh until it is sold. These maintenance costs increase the challenges for dairy farmers.
6. Medical check-ups- The dairy farmers have to spend money to keep the cows healthy and safe. The farm animals are prone to diseases and need proper care and treatment. One may, therefore, have to keep some money saved for the treatment of the animals. This is a must because it affects the quality, production of milk, and fertility.
7. Alternatives- Many customers have started shifting to the alternatives of dairy milk, and it affects the dairy farming business. But the farmers cannot reduce the cost because they are spending a lot to maintain the farm. People who aren’t a fan of dairy milk choose alternatives such as almond milk, coconut milk, and soy milk.
Outcome
There are multiple factors responsible for determining milk prices. It is important to have profits to maintain the ruminants’ feed, shelter, hygiene, and medical facilities. Besides spending all their money and efforts to produce quality milk, farmers can not set the desirable milk price. Such an issue may dishearten them and insist they look for better options than dairy farming.
Visit https://www.proteonpharma.com/
0
